PPC Ltd (PPC) Earnings Call Transcript & Summary

Good morning, and a very warm welcome to everybody here in person at the beautiful venue in Constancia and also to those online, very excited to have you all here today. It looks like we've brought some rain relief to Cape Town, which I understand was a lot warmer last week. My name is Debbie Millar, and I'm responsible for Investor Relations at PPC. On behalf of the management team, I would like to warmly welcome you here today on the second Capital Markets Day on the Awaken the Giant journey. Certainly a very exciting time for us. We've come a long way in a very short space of time. Matias, we were talking last night. It wasn't even 18 months ago, the market was asking us when are we going to reach 15% EBITDA margin. And I'm sure you saw the announcement this morning, 19.4% for the group for the 10 months to the end of January. So a long path, a lot being done, but certainly a lot more that is possible. This is a straight talking management team. As you know, I encourage you to remain engaged and open-minded and make the questions, engage with the team. They're keen to talk about the business. They're keen to talk about the opportunities, and this journey has only just begun. The day is split into two halves. The morning is a little bit more focused on an update. Matias will open the day talking a little bit about the journey so far, more focused on the operational side. We'll then have lunch and in the afternoon, a little bit more strategic focus, forward-looking capital allocation, strategic projects, and then we'll close the day. We ask that you please hold the questions, write them down whatever is needed. Hold the questions until the end of the day, and we do have a Q&A session. For those that are online, we will take questions online as well. So I won't waste any more time. We've got a lot to cover today. So it's over to Matias. I did want to tell you about the Rebec site visit tomorrow. [Operator Instructions] Over to Matias.

Thank you, Debbie. Good morning. Thank you for being here. Today is a very special day for us. Of course, your support and your interest in PPC, your ongoing support because I'm starting to see a lot of familiar faces, which I really appreciate. It's really appreciated. Over the next two days, we basically -- we will do what we have been doing the past two years. First of all, we will speak plainly and transparently. Secondly, we will share our views and opinions, but views and opinions that they are based on facts and data. In a context where the sector is still, we believe, largely misunderstood and misrepresented, we believe it's necessary to try to continue bringing clarity and guidance to investors. PPC is a 100-plus year-old iconic South African company, but high costs are not sustainable by history. They are sustained by leading from the front and by delivering sustainable results. We will talk about what it takes to lead a cement company in the regions we operate. Today it's mainly about two things: how we have been rebuilding PPC operationally; and how we have been redefining PPC strategically. From a business that won't look for excuses, a lot of them, some of you probably remember, to one that is focused on quality returns and sustainable value creation. How we have been rebuilding this iconic South African company. I think this slide captures the essence of the PPC journey in the past two years. And importantly, where we are heading after building a very strong foundations When I started this journey, I was deliberately vocal, I'm sure you remember that, and transparent about the industry and about PPC. I know that I put some of you very uncomfortable. PPC was an iconic South African business, but a business that has been neglected and become distracted in external excuses, wrong fundamentals and poor management. Financial and operational outcome were disconnected from performance. Accountability was uneven and decision-making process was not based on data. This open and direct diagnosis was again met with disbelief and mistrust, both internally in the company and externally. What you see in the slide now is how we set up to change, not through slogans, but through execution. Competitive and disciplined first, result and value follow. Rebuilding PPC has required more than superficial changes. It has required how the organization thinks and behaves. We focus on six fundamentals. The first one, and we have talked a lot about that was changing the organizational culture. That was not optional. The contrary was foundational. We simplified the governance, we clarify the roles. We introduced real talks, and we rebuild business data. Then this brought and helped to entrench the discipline and the accountability. The third point was to align performance to outcomes because remember that performance was not aligned to outcomes. The reason for the poor results were always external, was not linked to performance, to PPC performance. Actually, now you can see, I'm sure that you read the results that we published this morning. Performance is what is bringing and improving our returns and our cash generation. Another very critical step was to appoint the right people in the right position, also a very sensitive topic in the beginning. But we didn't stop just at [ ESCO ]. We introduced [ ESCO ] to you last year. And of course, we have an executive team with more than 100-year experience in cement and definitely best-in-class. But we didn't stop only with ESCO. We reshaped the past year almost completely the second line of management in the organization. We trained people, we develop people. We recruited people, and we strengthened our skills from an operational point of view, business point of view with seniority. A few examples about that. Three of our four plant managers, integrated plant managers in South Africa are new. We have our logistics management manager that was recruited, our Industrial Director, now our sale national manager. We have strengthened our team across the board. This helps to embed a deep business knowledge. Understanding our business is understanding our cost, our technology needs, our logistics and market dynamics at a granular level. It allows us to compete intelligently and anticipate competitive changes that are coming and not to react to them. It all culminates to making value-driven decisions. Whether it's pricing, capital expenditure, maintenance, growth and efficiency projects, the lens are always the same. Does this improve competitiveness? Does this generate quality returns? Does this strengthen PPC long-term position. The outcomes of all this is what you see today. Our commitment to change was not a big promise. I remember in my second results announcement, probably the question coming from some of you that I enjoyed the most was one investor asking me why we should believe you? Because we have heard this from PPC so many times. This was the question I enjoyed the most, to be honest, in the past two years. All what we have done has materialized delivering results and building the platform for sustainable growth. This is how we believe from disbelief and mistrust to engagement and momentum. Without doubt, internally, and I tend to believe that also externally, this has changed in a positive way. Now we come to the sensitive industry topics. While previous PPC management teams in the past and some competitors still today prefer to misrepresent the sector to cover up their own shortfalls. We, since day one, have called things by their real names, no matter whether people were going to like that or not. We have shared real information, and we have shared real analysis. The first thing we said was that PPC opportunities were internal. That we were able to deliver growth, margin expansion and returns with the same or even worse external conditions. We shift the focus from factors that we cannot control to how we run our plants and our logistics to whom and where we sell, how we price our products, how we allocate capital and ultimately, how we hold ourselves accountable, because when two years ago, we said that the opportunities were going to come within will put the pressure on us. We could have chosen easier path, but we knew that we were going to be able to deliver. The second thing was distancing ourselves from cement sector dynamics. When we came to PPC, everything was pretty much about overcapacity. The idea that some weak companies were going to consolidate. And by consolidating, they were going to get better and that the new local entrant was going to be able to fix a destroy company in something good in the short term. To the contrary, we said consolidation in the market might happen, but not in the way that was thought. Aging plants, they are not going to be able to compete. Players looking for market share at all costs. We are going to expand on that later on by dropping prices, they were going to deepen their already very weak financial situation and the sustainability of their business moving forward. That operational efficiencies and people skills are relevant in cement. Two years after we presented this different perspective and although some conflicting narrative remains in the sector, I believe that the facts speak for themselves. That brings us to the next point, which is investment and technology. With the changes in the competitive landscape, technology upgrade is not longer optional. The overcapacity as a description of the sector without differentiating all plants with new one was always wrong. Business that they are underinvested, they are at risk. While the ones that they are investing are the ones who will remain as the main players in the sector in the years to come. Let's move to the fourth point that also we are going to expand later on. But it's connected to the previous one. Chasing market share by irresponsibly dropping prices is value distracted period. If you are speaking to a cement companies that is telling you that it's gaining market share, you should be very concerned. Volume growth does not earn its cost of capital destroy values. Although we continue seeing some players in the market following that strategy, February was quite funny to see what was happening in the market. Player that was having serious problem with their operation, looking for clinker in the market was dropping prices to try to gain some market share. We follow the exactly opposite strategy, contribution margin focus. Finally, the external challenges are still there. They remain unchanged. But as we said [indiscernible], we don't think that they are as important as the previous topics to run a profitable cement company in South Africa. Our strategy is designed to create value despite these headwinds, not to wait for them to disappear or to change. What are really the cement industry fundamentals? Because if you don't understand the fundamentals of the business, first of all, it's impossible to run it efficiently. But also, in your case, it's very difficult to assess it. I think everything that we have done, humbly speaking, has started with our deep knowledge of the sector and the market. The value in this industry is determined by a small number of fundamentals. Let's start again. Plant age and maintenance cost. Unless you really believe in copper field, this is the first and main topic when you see what is happening with the cement company. Technology and investment drive long-term competitiveness. It determines energy efficiency, reliability, carbon emission, production cost. This is why we believe technology investment in PPC was and still is critical, and that is why the RK3 project or before we came the SK9 project in Slurry plant. We are going to talk about this later on, but keep in mind, we are running the two new clinker lines and cement integrated plants in the country in a few months. Cost competitiveness. The fittest always win in cement. How you handle your variable cost, your fixed costs, your G&A cost, determine how competitive you are. Yes, then you have to take pricing decisions. But if you don't run your cost properly, you are not in the game, you're not even invited to the game. There is no game if you are not able to handle your cost properly in cement. Then comes the footprint. Paulo always mentioned a phrase that they have problem to remember. But basically, Paulo is something like cement does not fly or cement does not move. We have a very clear example in our market. If you follow AfriSam. AfriSam has a nationwide footprint. And you're going to be in Durban and you're going to find AfriSam probably. And you're going to come to Cape Town and you're going to find AfriSam. And you're going to move to Botswana and you're going to find AfriSam. You're going to find AfriSam almost everywhere, which returns and margins those sales are bringing. Proximity to key markets is critical in cement, and that is where PPC has a huge competitive advantage. Our plants are located close to critical cement consumption centers. And as I said that you are not able -- going to be able to compete if you are not able to run your operations efficiently and at a low cost, if you need to run your logistics to expand your footprint far from our -- from your plants, game over, not because I said it. The fourth one, skills. I would say skills plus business knowledge. I come again. We have been able to brought a ton of experience and seniority to the team. And it's a pity because the person responsible for that and who should receive a lot of credit, she was in the room now. Now she's not. But clearly, no, was the one that we should give a lot of credit because she was the one to be able to bring and to assemble this management team. I would say that it's rocket science, cement. But also it's not an easy business. It's not a business that you are coming and you're going to say, okay, I will run this business exactly like I run others. Cement is a very specific one. Again, a very simple product, but a complicated business. Then we come again, and we are going to come again to margins. This is a capital-intensive business. That requires continued investment over a long period of time. This is not a business that can be sustained with low margins. In the short term, can't work. Recently -- not recently, for the past couple of years, there is a new term that was introduced to the sector that we, with our decades of experience in cement, never heard it in the past. The breakeven. What is breakeven in cement? A breakeven target in cement. We are not a family's [ pacer ] shop in a rural area in South Africa. These business require high margins. No one could invent the wheel in cement. And finally, to have a strong balance sheet. Financial strength is an outcome, but also an enabler of the outcome of a cement player. The margins give you a strong balance sheet, but also enables effective capital allocation, including reinvesting and returns to shareholders. Brenda call it the beautiful circle of life. Probably was a little bit exaggerated, but I think represents what a strong balance sheet means. Just doing one of them is not enough. You have to do all. The awakening the giant strategy by doing all those principles and fundamentals is delivering results. We are becoming more competitive. We are becoming leaders in margins, cash flow, generation and ROIC. Next one. Thank you. Why and how we have redefined PPC strategy? Which are the pillars based on what we build that strategy that is delivering what thought to be impossible. We still read some comments saying that, "Oh, if the market does not come back or the economy does not improve, the results in cement can be delivered", wrong. First of all, you need to have the market insight to understand the business. And come again, we built a very experienced and senior team. And now the lady that was responsible of that came back to the room. So a lot of credit to her. Because that was the beginning of everything that came afterwards. PPC has pushed me to appear arrogant and some people are mentioning that to me, and I don't like it. But I need to say that we have a clear understanding of global, regional and local markets. We understand the competitive dynamics in Southern Africa region. Then we understand the demand dynamics. We understand the pricing elasticity. We understand the logistics importance and competitor positioning. That allow us to anticipate what is happening, not to react, that help us to make informed decisions about where to invest, where to compete and where not to compete. The second point is that we spent a lot of time in the first first, three months building the Awaken the Giant strategic plan. And we believe that to have a robust and comprehensive strategic plan known by our teams and known by our main shareholders is a very important advantage. It is a clear integrated strategy. It connects operations, people, capital allocation and commercial decisions into a single framework with clear priorities, milestone and above all, accountability. It's not a short-term strategy, but the long-term strategy for value creation. Lastly, execution and results. I know that a lot of you, when we first engaged the couple of years ago, they were saying, yes. But no, this is not going to happen. We have heard this 20 times. We have heard the story of a turnaround's in PPC in the past. And I understand that, and I understood it at the time because plans matter, but results matter more, much more. I enjoy coming here and engaging with you. But honestly speaking, I enjoyed more delivering the results that we deliver and we informed this morning. We want to be judged on our delivery, not in how articulated we are. And of course, we say this since day one. When people were asking us, Matias, what the risks are. The risk always when you have a solid plan is execution. Because we believe that we are doing very well in these three items. We are confident that the improvements are bringing a structural and sustainable change even again, in a low growth market. I don't know, Michelle, if the air conditioner is working or it's me, but I mean, it looks a little bit, I believe this slide is extremely important. Let's have once for all the real talk about the clinker capacity in South Africa. This image on the slide explains why investment and plant technologies are critical and how PPC is moving ahead of the market on this critical matter. The old assets are less energy efficient, less reliable and structurally have a higher cost to operate. This is a structural disadvantage. There is no possibility to escape from that. Over time, technology, asset quality and investment determines who wins the game in cement. This pie chart shows very clearly a breakdown of age of the installed clinker capacity in South Africa. And then it shows how PPC compares to the rest of the players in the market. Today, the South African market, excluding PPC, is still dominated by older, less efficient clinker capacity. Let's start from the left. This is the -- again, this is the clinker capacity in South Africa without PPC. As you can see, a significant portion of the clinker capacity is old, 60%. And then without PPC, you have 41% new or recent capacity. Let's put it names. In the 41%, you will find Mamba, you will find Sephaku, and you will find one of the two plants of MBC. On the old plants, you will have the two lines, two AfriSam lines, two Afrimat lines and one of MPC clinker lines. Let's go to PPC, what we have today. 60% of our current capacity with RK3 is new or recent. And 34% of our capacity in South Africa is old. Try to guess what is the old capacity and which one is the new. The old one are our plants in the Western Cape. The new or recent, the rest of our plants. So what is happening in 12 months? PPC will have 100% of our capacity is going to be new or recent. But not only that is extremely important, which I believe it is. Let's go also to the Mothballed capacity. The rest of the cement companies in the country, they have a 9% extra capacity in case the market improves. PPC nowadays has 35% of our capacity Mothballed. And in 12 months' time, that number will grow to 42%. And an important number in that 42%. In 12 months' time, that 42%, 15% of that 32% is going to be new capacity. So we will have an extra 15% capacity in 12 months' time, considering the current demand that is going to come from new very efficient capacity. That number today is 6%. So who might be able to take an advantage if the economy recovers in South Africa? And more importantly, which margins are we going to be able to run if the demand improves? Next one, please. Why volume is the wrong game. Paulo will develop this point in the presentation later on, explaining that profitability is not linked to capacity utilization, but more to market and players' behavior. Last year, something funny happened to me when we were visiting the RK3 plant, and I was talking to some of you and some of you told me, Matias, your presentation was nice. But really, we want to listen more from Paulo. So you will have more Paulo today. For many years, the cement industry, including PPC narrative, equated success with volume growth and market share, wrong. Higher utilization and dilution to fixed cost was the assumption for profitability, all cement paradigma, 20 years old. After 2008 worldwide crisis in cement, that paradigma changed. Apparently in South Africa, a lot of people didn't receive the memo. This is a float approach. Cement producers cannot drive the market demand. Pricing discount does not create additional sales volumes. It brings player profitability to a lower base. What cement players can do and must do is to drive value through cost competitiveness and price discipline. Selling cement at low margins might protect volumes in the short term, but it erodes shareholders' return, erodes ROIC and long-term sustainability. Let me expand on pricing discipline. What is pricing discipline? PPC in the past used to show that the company was pushing the price up as a signal that the company was trying to recover margins. Was partially true. Of course, if tomorrow, we start to sell all our cement in the lovely Durban, our prices are going to be higher. But do you think that our margins are going to be better? What is pricing discipline? It's not only the invoice price. You can push easily your invoice price. And then you can put it in the results, in the balance sheet, I will look that you are pushing price up, while at the same time, you are destroying your margins with bottom line is the important thing. The pricing strategy should be a combination between, yes, the invoice or the actual price, what commercial channels are you using to sell your cement? What products are you selling and from which plants are you selling those products? Quality of revenue is what allows cash returns and reinvestment. In summary, we believe value is created at the intersection of pricing discipline and cost competitiveness, not at maximum volume or market share at all cost dropping prices. Well, I hope at this point in time, you are all very familiar with this slide because we are bringing it again and once again. You know the message. By now, I think you know that -- our clear strategic statement is our strategy is competitiveness like we shared with you last year at our Capital Markets Day. The Awaken the Giant is not a single initiative, and it is not a short-term recovery plan. It is a clear, deliberately strategy built to reshape the organization to be structurally competitive for the long term. It is based in an operational turnaround and the incorporation of strategic projects. But this couldn't be enough without a reshape of the organization. We needed to integrate the drivers of competitiveness, which are the drivers of competitiveness, technology, people, culture. At the center of the rebuild is a very simple idea, deliver results today while building a platform for sustainable growth tomorrow. Those two objectives must coexist. And at PPC, today, they do. A plan is robust when strategy and execution meets with short- and long-term gains when they are together. The Awaken the Giant was designed to ensure PPC recover from a very long negative cycle to deliver quality returns and to build a durable platform for shareholder value creation. Remember that in some of our conversations last year, we shared with you that when we came to PPC, a lot of people were really happy. I mean, employees were happy, customers were happy, suppliers were happy. Definitely, consultants were very happy. The only people that were not happy were the shareholders. Operational improvements deliver returns today. Capital discipline protects returns tomorrow and high-quality investments create long-term shareholder value. This can be really seen in terms of our performance metrics. The focus on quality returns talk to the operational turnaround, EBITDA, EBITDA margin. These have delivered immediate results in the first and second year of the turnaround. But a turnaround only matter if ultimately translates into returns to shareholders. This talked to cash flow generation and improvement at of ROIC. Both have shown tangible and consistent improvement these first two years. Finally, the third one talks to all the metrics plus disciplined capital allocation and future earnings. We must invest where projects are clearly value accretive while keeping the capital allocation discipline. We have been doing that. We like to say that execution is where credibility is earned. This is not a fluffy message. It's what we tell our teams every day. Credibility comes from delivery. Over the last 12 months -- 22 months, sorry, PPC has delivered tangible improvement in a mute volume-driven market. This change in EBITDA trend was not a result of an economic supportive context, but as a product of execution on a turnaround plan. Looking at the chart that display our group EBITDA history on a like-for-like group portfolio basis, it shows the journey clearly from a position of decline to a strong recovery. You can see the historical base we had to rebuild from consistent and prolonged decline and trends in the organization. From 2017 -- sorry, for FY '17 to FY '23, a drop in EBITDA of 47%. From FY '24 to FY '26, 10 months, 48% EBITDA growth. The external factors didn't change. I would say that market dynamics are even worse now than two years ago. Some competitors are destroying more value now than the competitors that they were operating in the market two years ago. This means that the improvement is a result of a structurally better business that is delivering. Michelle, sorry, really, the air conditioning thing is becoming a problem. This is what we announced this morning. I think all these numbers bring the presentation so far together. Last year, I received a lot of questions of whether there was more to come after a very strong first year of the turnaround. And I think these numbers answer -- give the answer for themselves. EBITDA is growing, EBITDA margin is growing, and we have been strengthening the quality of our earnings big time. Debbie remember, and I remember too, my first conversation with some of you two years ago when the target was and the question was, one day PPC will be able to get to a 15% EBITDA margin because at the time it was 12% Today, we announced that we are at the 19% EBITDA margin level. The full year margin will like smoother a little bit. We might be a little bit behind in '19. We have a breakdown in one of our -- in one gearbox in one of our mill in Zimbabwe that is affecting a little bit February and March results. And we are starting the shutdown of the plants in our inland region also in March. So we can see that margin dropping a little bit, but not significantly. Free cash flow in South Africa, same story. 10 months at a strong ZAR 438 million. Again, a reduction comparing to last year just because the shutdown of the plants are starting now. So we have some impact in inventory nowadays that is going to be normalized soon. In Zimbabwe, a particularly strong proof point. And I know that South Africans have some problems with Zimbabwe businesses. I see things completely differently. On top of the previous year increase, the operational stability improvement resulted in a record cash generation -- record cash generation that in turn allow record dividend of $36 million declared and paid. $36 million paid. ROIC continued to expand. Remember, we started from the 6% ROIC. And nowadays, we are in the 13.4% by half year FY '26. Capital allocation remains tightly governed. We prioritize quality returns, quality returns, cash generation and investment while keeping a solid balance sheet. I will answer this question now, so we can speak about other things during the break. There is more to come. Our confidence is grounded in fundamentals, not optimism. We are not particularly a very optimistic management team as personalities, by the way. We have been clear throughout this presentation that the operating environment remains challenging from a market perspective in South Africa, contrary what is happening in Zimbabwe. In South Africa, competitors with different priorities and pricing discipline remains in place. I don't think for the long term. But our confidence is rooted in our ability to deliver even in this context. We don't have a condition in the hotel, okay? The austerity goes to no air condition. Sorry for that. PPC enters our FY '27 from a position of strength. The EBIT opportunity is clearly here. We have achieved a step change in the last 22 months. But more important, a new step change is coming in FY '28 with RK3 and continued operational discipline. We have shared the four areas of the turnaround in the past. And we are showing again how all of them are improving. Without getting into details, we can see that progress has been achieved, but much more will be realized. These improvements are planned and being implemented. The effects will impact going forward. Importantly, they are fully internal. So much more is to come. Let's unpack the day, and I am exactly on time. These are the topics of the presentation that each of the [ ESCO ] members are going to present during the day. They are going to be rich in detail and insight. But one thing they all have in common. They form part of the strategy. They are connected. They are consistent. Today it's about rebuilding PPC operationally and as we said, redefining it strategically. These six elements capture our journey. First of all, Ernesto will bring the operations and supply chain update. It is called building muscle because it's not about quick changes and once-off impacts. The changes in operations in cement take time, are made of detailed plans, improved CapEx and execution. The effects in reliability, output productivity, planning execution will have in the future a compound effect, a beneficial one. Then Bheki will present our commercial approach, competitive by design, the shift from chasing volumes and market share to chase contribution margin, quality sales and choosing the right commercial channels. Then Ndima will introduce himself to all of you for the first time as the new Managing Director in Zimbabwe, a core asset with tremendous value to unlock. The morning will be more operational. And in the afternoon, we will have more strategic topics. We will start with Horacio and of course, the RK3 project and other strategic projects. Then Brenda will come with the financial perspective on how we are addressing capital and how this discipline is a base for value creation. Before my closing, finally, Paulo is going to come, and Paulo will take us through the fundamentals on cement, very important, insight on what creates value in our industry. Thank you very much.

Thank you, Matias. It's working. Can you listen? Okay. Good morning, everyone. Thank you again for being with us this morning. I'm Ernesto Acosta, COO of PPC. And as Matias introduced, I will update you all about the operations and supply chain. And let me remember one of the comments that Matias did. This is about training, training, training and building muscle, building muscle. It's not -- we cannot expect a step change, although we have some step change to show. But in operations, in cement manufacturing, there is no step change. So it's strong and sound plans and then execution, skills and be consistent with the maintenance routine with the way that we operate the [ gains ] with the quality starting from the quality to the dispatch. So I will unpack three main areas. First one is logistics and procurement that we can say that we did a step change, especially in logistics. And I will unpack those, and you will see some results, some impressive numbers savings coming from especially logistics, but also from procurement after some tender process, important tender process that we were able to execute during the FY 2026. Then we will see some good, but still first baby steps improvements in our KPIs. Last year, I introduced four important metrics, how we measure the performance in our plants. So I will update about the same four and deliver some concepts and explain further why it's important those four KPIs. And all of this is based on what we call the performance program and the plant performance improvement plan, PPIP. Nowadays, is the bread and butter of all the operations, all the plan, the plant performance improvement plan, the PPIP, all the teams, all the plant, there is one plant per each plant that is feedback every fiscal year. So we already have in place the FY 2027 PPIP for each of our operations. But let me start with safety because it's one -- or our core value. And unfortunately, we had a devastating news the 5th of November 2025 with a fatality, one fatality in our plant, Hercules plant to be more precise. I have to say that -- it's tough to say this, but it was not a surprise because part of the cultural change that we are pushing is related with safety. And it starts with the way that we, as a company, were presenting the result. That's why we introduced a second indicator to measure the performance. Just to be really clear, the bottom -- the upper graph is the indicator that we were presenting before the FY '25, just the frequency rate, meaning how many accidents, lost time injury accidents we have in the year. If I were going to just present that one, I will be smiling because we did better than previous year. That's why we introduced -- when we did the assessment of our safety statistic of the last 5 years, we immediately noticed that the problems were not the number of accidents. The problem was the severity, the consequence of that accident. That's why we introduced and it's part of our -- the annual evaluation of all our teams, operational team, the severity rate, which measure how long it takes the person to recover after the accident. Of course, we aim for the 0 accident. We would love to have 0 at the bottom -- at the top. But the problem in PPC and in general, in the cement industry as a heavy industry is the severity of the accident. That's why we introduced the bottom one, and you can see that it's out of scale and was a problem before and we did a 5-year plan to be world-class by 2030. It was really devastating news, the accident. Just let me briefly comment how the accident was. Of course, there was a thorough -- full investigation, DEL, Department of Employment and Labor was, of course, involved. So basically, a very senior and experienced contractor working at the repairing and fixing the roof of one of our warehouse, raw material warehouse in Hercules plant fell from approximately 25 meters and unfortunately died, very experienced, highly trained person. He held the highest qualification in work at 8, which is rope access Level 3, which requires not just a theoretical exam, but also demonstrate experience at work. He was working installing cellphone towers amongst many other places. So very, very, very experienced person that at the time that he fell unfortunately, was wearing the harness, but was not attached to the lifeline. So basically, it's like I'm using the jacket. So it doesn't make any sense to wear an harness if you are not locked to the lifeline. So we did a deep introspection and we decided to push even further the specific plans that we have for each plant. But at the end of the day, we had the real talk with the leadership in each plant. Safety starts from the leadership. Then each of the person needs to play a role and must, of course, do what is required to be done, but start with the leadership. So -- and we measure the performance of the leader by what we call a leading indicator, which is the planned job observation. So we -- not force, but we push our leaders to go to the field and see how your teams are working. And then this must be reported in our system to make sure and detect the gaps and opportunities and make sure that the number -- the times in the month, in the week that you see your team working is registered. And then we analyze the gaps and then we have some targeted intervention in the different departments or in the different plants. So we made the message very clear. This cannot be repeated. We can accept everything, but a fatality. If you compare year-on-year, the FY '26 compared with the FY '25, we saw good progress in those leading indicators. Almost we multiplied -- we have 3x more planned job observation than the previous year, but it's still from a very low base, still a lot of work. And again, it's part of the cultural change that takes time. Sometimes it's difficult for a 20, 25, 30 years old -- 30-year experienced employee to change the way that he's doing things, but we made the message very clear. We prefer separate ways than keep employees bypassing and not following nonnegotiable safety rules. The plan didn't change. We want to be a world-class organization in those 2 indicators maximum by 2030, but now we are going to bring close. And this is part of the annual evaluation of all of us, starting with me, all the Exco really not but starting with Matias through all the company. Okay. After a tough start, let me move. 4 indicators, 4 KPIs that explain the turnaround in operations. Last year, I presented and we gave some guidelines about what we can expect in those 4 specific targets. One of them measure the efficiency of our herd, which are the kilns in our integrated plants. It's a herd because must run 24/7. That's why it's like the herd. And we measure the clinker production of each kiln. I'm happy to announce that we increased 10% clinker production compared with the previous year. And I will unpack that in the next slide, when I will go through the details because I will present one specific metric that we measure our kiln and why we choose the kiln because 70% to 80% of our cash cost goes in 1 ton of clinker, fixed and variable. Second metric, which also speak about competitiveness, about variable cost, about cost per ton of cement, increase the utilization of extender. Basically, 3 things is replace clinker by or limestone or fly ash or slag. Those are the 3 extenders that are used in South Africa, but also in Zim. Well, we measure that indicator per plant per product, not just the bottom line. We gave a guideline between 1.5% and 4% increase of the extender or as I prefer to say reduction in clinker, but David told us that it's better put in the positive way, so increase the extender, not reduce clinker. Well, we did between 1% and 2% across the board in all the products with a special highlight for Zim. Part of the amazing results, stunning result from Zimbabwe comes from almost a 5% reduction in clinker consumption for the same cement volume. Reduction of coal. Different percentage, different situations or percentage of weight between Zim and South Africa, but always transport, inbound, coal and electricity represent 70% of your variable cost. So reduction of coal due to improvements in the kiln or due to alternative fuel utilization is always more than welcome. That indicator we did back during the FY '26. Basically, we did the opposite. We increased the consumption of coal. Basically, why? Because we couldn't reach the level of alternative fuel in our Western Cape plants. And due to the heavy rains, the availability of fine coal to substitute the DAF coal was not there, was not available. We couldn't handle with the heavy rain like a dust, which became a mud when you -- when there is heavy rain. So we did the other way around. We increased 5% the coal utilization. But the guide or the target is the same. We must reduce between -- we mapped the opportunities to reduce between 3% and 12%. So for FY '27, that is the target. But 10 months, we did -- we went the other way around. So we didn't perform well in that indicator. Finally, be more efficient in and reduce our cost of electricity. We did it. Unfortunately, we didn't reduce the cost of electricity because our friends of Eskom increased more than 12% the tariff. But we partially offset that increase with better performance of our mills and kilns that I will unpack in the next slide. And the overall -- so we could crack down that increase 2% by better performance, but also because quarter 3 of FY '26, we switched on the solar plants in Dwaalboom and in Slurry. Remember that will be presented by Horacio. It brings nice benefits, but in that 2%, it's not the full impact. It's just a few months of impact of the solar generation in our 2 Northern region plants. Kiln. Last year, we presented this almost the same slide. This is basically a summary of what the plant performance improvement plan means because again, this is not by chance that the indicators improve. It's not by chance. You can be lucky 1 month, 2 months, but in cement, consistency is everything. There is a sound plan behind the improvements in the KPIs and in the kiln performance, which is basically like many others, continuous improvement cycle. In this case, we divided in 3 steps -- sorry, 4 steps, the PDCA we call. And basically, we selected, as we explained last year in the Capital Markets Day, we selected 17 KPIs across the full production process. The bulk of them are in the kiln because as I said again, 70% of our cost is up to clinker. So if we are able to improve those 12 KPIs, we will make a big difference in our variable cost and especially -- and also fixed cost. So -- and we divided and we clearly define 5 categories to measure the performance from the worst E to the best A. So we were able with executing the PPIP to deliver an improvement of 2.4 percentile point increase, and that explains why we were able to produce more clinker last year -- this year compared with the previous year. But where we are and we reached -- I will give the number. We reached 84% of our OEE with all the kilns, 84%. Some companies are happy with the 70%. So we said 84% where we are? The OEE is measured is split basically in 2, how we measure. We are in Class B. That is where we are with 84%. One kiln, only one is B. We are running 5, most of them are D and C. So still a lot to go and to improve. And if we are able to push all our kilns to Class B, not even talking about world class, which is the A, A is a world-class kiln. We are not even thinking there yet. But just to push slowly to Class B, well, we are talking about additional 6% that Matias already mentioned, we have additional capacity to supply the market if the volume and the sales come without even thinking around a mothball kiln. Just with the current assets, better performance will allow us to increase our demand -- increase, sorry, our production volumes and then supply the market. Let me remember one slide that Matias mentioned, which is the right-hand side pie graph. In FY '28 in South Africa, we should be running just 3 kilns, not 5. So that will bring due to the change in the technology, additional improvements in our cash cost. I can't see the time. Okay. Okay. Logistics. The single biggest cost line in our business between inbound and outbound by far. Remember that, that was a function that was fully outsourced. So we designed it, unfortunately, a phased approach. When we did the deep dive, we designed a phased approach because even the information was not there. When I was doing the assessment, we met with the Exco team, I said, look, I cannot even assess the logistic function because the information was not there, not there because we didn't have that. That function was outsourced. I'm happy to report or to update that in South Africa, we are walking in the Phase 4 and in Zim, we are one step behind. We are still in the Phase 3, but with good progress so far, Ndima will unpack that one. But it's really encouraging to see how we were able to progress. And remember, in the FY -- Capital Markets Day of FY '25, we reported a 12% reduction in our outbound logistics in rand per tonne per kilometer. Those are the numbers in the 10 months of this FY, an additional 9% reduction in outbound cost, which allow us to change the footprint and be more competitive in other areas that possibly in the past, we were not as competitive as it was required and an impressive 22% reduction in inbound. How it is possible? Well, 2 things in inbound. We changed the split between rail and road. We don't control, unfortunately, TFR. An increase on TFR is close to 2 digits, and you cannot negotiate with them. It's just they communicate the increases. But okay, we have the choose to -- the option to go to road. So we are moving the percentage of transport -- inbound transport from rail to road. That requires investment. Yes. We already changed our Hercules plant to receive clinker by road instead of rail. And we will keep doing that at least while we see to keep controlling our inbound cost. But the most important factor that explains that reduction was a 36% reduction after the tender process that we did in our Western Cape operations for the limestone transport between Riebeeck and De Hoek. Now let me remember that our the De Hoek mine is close to the end of the limestone reserve. So one of the plant to -- even is in the pipeline to -- before we run RK3, we should be able to prove that our Riebeeck plant can deliver enough limestone to feed the future RK3. So we decided to anticipate that specific process and start now and all the limestone from Riebeeck be delivered to De Hoek. So we increased 4x the transport volume from Riebeeck to De Hoek. And with that huge increase in volume, we were able to bring down the rates 36%. Was -- it's a new supplier, of course, not within the tender process and a new supplier was awarded with that tender, roughly 1 million tonnes per year. So what else is coming in logistics in FY '27? Basically, we must do the tender process of our northern region, 2.5 million tonnes is what we have to do the tender process. And let's see what is coming. Procurement. Let me start maybe one step and then I will address the 4 topics in the slide. Procurement in the past was reporting to each plant manager. So it was decentralized and each buyer was at the plant, which is right because the buyer must be close to the internal customers, but reporting to the plant manager meaning that there was different ways to do things. So immediately, we'll say, no, no, no. All must report to one must be at the plant, yes, no problem. But the reporting is ahead of procurement. It's not reporting to the plant. So it's a separate function. One thing is operations and another thing is procurement. So we separate the function. And we define it clear guidelines about how procurement, which is the number of quotes that you must get depending on the amount of money that the tender is. So we define and we structured in a different way the procurement team. In June 2025, we did an additional change. We changed the leadership in procurement. The head of procurement at that time left the company, and we put procurement under -- we only unified logistics and procurement under supply chain. So that was the second change. And basically, the new Head of Supply Chain was leading some of the tender process that were very successful, like I already mentioned the 35% reduction in limestone and some other tough negotiation, like, for example, with paper bags that usually they increase for a lot of reasons when it's not the exchange rate, is the war, is this, is that always the increases are above inflation. Well, we were able to keep it at 4% aligned with the inflation. And again, more to come. We are now busy with the tender of the limestone quarry at the Slurry and at Colleen Bawn are the 2 quarry tenders that we are busy working. One of them is a -- we already received the offer. We are evaluating the offer and the other will kick off in the second quarter of 2027. Those are important tenders for us because the volumes is -- we are talking about more than 1 million ton volume. So any saving there has a multiplier effect because the number of tons that we move are a lot at our quarry. And then just an introduction, which is we did a first deep dive in our spare part inventories. Matias mentioned that one of the reason of the reduction in the cash flow in South Africa was the working capital. Not specifically the spare part, it was more related with our production-related item, meaning clinker, cement, coal and raw materials, but spare part plays a role, an important role, USD 20 million in Zimbabwe, almost ZAR 400 million in South Africa. And we put -- it depends. We decided to separate from the plant and it's part of the portfolio of the Head of Supply Chain. So the control and the stores is part of the supply chain portfolio. And we were able, again, with the first assessment to keep let's say, flattish, but really was a reduction of 1% of our inventories. But during this fiscal year FY -- sorry, next one, FY '27, the idea is to work hard in this indicator and review all the maximum stock level, reorder point and the criteria to create new material codes in our -- at our plant. Of course, we must find the right balance between keeping the necessary spare to make sure that you have available the spares when there is a problem. But at the same time, also the financial and making sure that we don't grow our inventories almost every year. If I show you the trends of the last year -- years, you are not going to believe. So that is another, let's say, area or an action plan that we are busy building for FY '27. So in conclusion, plant performance improvement plan is a cornerstone of our turnaround process, the Awaken the Giant strategy and our commandment. So I will keep reporting on the 4 indicators from time to time, maybe I will introduce a new one, but keep reporting in those 4 items. Procurement and logistics are key areas, and we still have opportunities there. And I didn't update because the plan keeps the same, but regarding our decarbonization journey that remember just to -- for those who were not present last year, I presented a 5-year plan to reduce 22% our CO2 emissions by 2030. That plan is -- those plans are part of the PPIP because are based on the reduction of CO2, our plan to reduce CO2 in PPC is based on 4 areas: extenders, green energy, coal consumption and OEE of the kiln and are the same 4 that I presented as KPIs in our operational update. So the improvements that we were able to deliver in FY '26, I want to highlight especially 2 plants, Colleen Bawn and Dwaalboom were the 2 plants that the improvement -- the 2.4% (sic) [ 2 percentage points ] of improvement in our kiln performance was the average of our -- all our plants, but both of them, Dwaalboom and Colleen Bawn improved more than 5% each. And you will see in Ndima's presentation, the impact or he will show a breakdown of variable costs in Zimbabwe and almost 20% is imported clinker. So each additional ton that we are able to produce in by our own team plays a huge role. And again, we are in Class B. So it's still a long way to -- for Class B, but we are busy working on that, and we are confident that we can make it. Okay. That was me. I think that now I will hand over to Bheki. Welcome. Thank you very much.

Thank you. Thank you, Ernesto. Ladies and gentlemen, good morning. Do I still have the energy? I hope you're still around here. My name is Bheki Mthembu, as it's been said, I'm the Chief Revenue Officer of PPC. Indeed, it's my great pleasure this morning to stand here in front of you and give you some of the exciting news and the runaround of the things that we've done in as far as the commercial space of PPC is concerned in playing our part in this turnaround period that you see in the results. Earlier on when Matias was talking this morning, he said the market was expecting around 15% EBITDA margin, and we've delivered 19.4%. I thought you were going to give a big round of applause for that. You've got a chance to do that this morning. Thank you so much. Thank you so much. That was a good icebreaker so that I can get to the business of today. We have a clear commercial framework in PPC. I think Matias touched on that this morning. It's all about contribution margin. And our commercial framework touches on one objective only, which is how can you optimize contribution margin because the game plan is not only about volumes. It's all about sustaining profitability and what strengthens our balance sheet and fuels the growth of the business. So our commercial framework is very clear. It talks to or it's anchored by 3 pillars, which I will unpack just now. Pillar #1 talks to data-driven decision-making, garbage in, garbage decisions out, as you would know. It talks to quality of the revenue. And it talks to competitiveness in the markets where we play. And thank God, we are competitive by design, hence my title this morning. So all those put together, you'll make -- and it helps you to realize optimization of the contribution margin. So pillar #1 talks to data-driven decision-making. Without using accurate data, you'll end up in the wrong direction in terms of your decision. So we are happy that in our turnaround, we've worked and put a lot of efforts to ensure that the information we have is accurate and it's real time so that we are able then to make the right pricing decisions, correct? And also, it helps us to understand when you try and source your products in terms of your product allocation, which plant you're going to source from. And it helps us to understand because we now have control over the logistics as to the distances and the destinations that you're going to cover. As Paolo would always say, cement cannot travel longer distances. So it informs, therefore, our decision pillar #1, having data that is accurate and as such, we are able to make decisions that are sound. Secondly, quality revenue. When we talk about quality revenue, it talks to the discipline that we have to apply in terms of our pricing, which is all about protecting the value, not chasing volumes. And it also talks to how we strengthen our relationship with customers and how we segment customers, meaning understanding the customers as you have customer segmentation in your spaces, ours will be retail, construction and industrial. It also helps us to drive optimal product mix because it's not always just about price. It's also about the product that you are giving to your customers. And in a space where we are playing in the cement industry, some people may say cement is just great. Cement is not just great. We are having various types of cement products, which are application specific. So understanding the application and the requirement of your product in the market space, then you are able to have a better engagement with your customer. And the third pillar talks about competitiveness in the market space. We believe that we must win sustainably in the markets where we play. And our competitiveness, therefore, is built on the 4 things that I will mention. It's built on the consistent service delivery. When you order your product and you want it to be on your construction site at 8:00 tomorrow morning because you want to do a port, it better be there at 8:00. We talk about product consistency and reliability of supply. When it's got to be [ 52,5 ] strength performance for a 45 MPA concrete that you are putting in, it better give you that. And when it's done that, it better be available when you want it because you don't want to switch and, especially for a construction site that runs over a longer period. And one thing that I think I believe we are probably a differentiator against our competitor is the fact that we are able to provide technical expertise, which some other players cannot do. We've got the state-of-the-art laboratory in Johannesburg. We are able to engage the specifiers of key projects at an earlier stage and be able to advise them on what product they need to use for different various conditions and the regions where they play. So price may win you a transaction, but we believe that service and technical expertise wins you long-term partnerships. Matias touched on earlier on about the contribution margin importance in helping us to make right decisions when it comes to allocation of our capital. But to help a friend, perhaps somebody is asking why is contribution margin so important. They keep on latching on it and talking about it, even Bheki is emphasizing it, it's -- there are reasons to it. One of the reasons it's important is you'll try and follow this chain here without bore you. It's important for us in identifying the product and the regions for profitability. If you have transparency in the contribution margin, you are able to then truly make a sound decision on where you're going to source a product for a specific region for a specific customer. It therefore helps you to highlight the regions because remember, when we talk about contribution margin, we are able to map a contribution margin of product per product, a contribution margin of product per plant, the contribution margin of a product per customer, a contribution margin of a product per region. That's how you slice it. So then you are able to make your sound decision. Secondly, it does a big job in covering your fixed cost. Contribution margin absorbs our fixed cost, especially if you've got a healthy contribution margin, you are therefore able to make decisions that becomes your added advantage, especially for our business, which is manufacturing-heavy. If you are able to play within the economies of scale in a business that is manufacturing-heavy, then you are able to take added advantage in that your decision becomes diluted in terms of what is your rand per tonne contribution margin cost of the product at the scale level. The third one is talking to it improves the control at the operations. It's important because it helps drive a higher level of accountability into saying contribution margin, especially when people understand the numbers, contribution margin is not just the commercial team's thing because we work it together within the value chain of the business from operations controlling the cost because they understand and appreciate the reason why they have to do that. to a logistics guy that needs to drive the logistics team towards reduced costs of logistics -- what you call cost of the logistics rand per tonne per kilometer to a commercial person that is up there in front of the customer discussing issues of rebates, issues of discounts, issues of prices that are very much critical for contribution margin. It also supports our strategic pricing. This is where contribution margin becomes very powerful, ladies and gentlemen. Our pricing decision is not, therefore, just an emotional decision with the customer nor what I call the market panic decision that you make because a supplier or a competitor has reduced their prices, then you jump and reduce your price. No, no, no. No, no. Instead of that, it helps us to make informed decisions that protects the shareholder value. Number five talks to, it guides production and sales decision. This is important because it informs what we produce at the operation site, how we allocate capacity in each of our production lines, which order to prioritize in a given time in a given season, especially if you are working with a constrained environment in a specific operational site, it's key. And the last one, obviously, we've said a lot about it. It helps and it's so critical for our capital allocation. So having outlined our commercial framework as well as spoken about the centric -- or the importance of the contribution margin in our day-to-day decision-making, you're probably asking a question as to how do you then execute that. Last year, I shared with you this popular route-to-market framework. And this route to market framework talks to one thing at the center of it all, the lies maximization of contribution margin. And we said they are what you call the 4 levers. I call it the 4 lever execution engine of the commercial team when it comes to maximizing contribution margin. If you slip on any of these things, chances are you won't come out with maximization of contribution margin. We spoke about diversification and expansion of our customer base. We spoke about optimal sourcing in terms of the various sites that we have. We talked about sales and distribution importance, and we spoke about the product mix. This morning, I just want to unpack it for you. Why I want to unpack it for you is to say what have we done thus far in the turnaround for us to ensure that our route to market framework is indeed effective and it helps us to realize the maximization of contribution margin. Our route to market is not about pushing more volumes. I'm sure you appreciate that by now because we've said it many times. But it's about pushing the right product to the right customer at the right price through the most efficient channels with the cost discipline embedded in it. If you get that right, then you'll be able to maximize contribution margin. Quickly, I just want to share with you some of the milestone or the road that we've uncovered in our turnaround on the commercial space. We were very intentional about this lever that talks to diversification and expansion of the customer base was not just theory for us, but we put this into practice in our decisions. Our objective was clear. We wanted to make sure that we increase our direct relationship with our independents. And in so doing, we cut off the buying groups and then we went much more into the independents directly. Hence, the graph we show you last year, that was a percentage of independents in our customer portfolio. It grew up, as you can see. And then we used to go through buying groups and then that has been squashed in that amongst buying groups, you would have had a lot of independents that were enlisted thereof. It wasn't intentional. And we continue to focus furthermore towards any other initiative that will see us improving our value propositions to our customers. As such, we lock more independents. The other one is the lever, which focuses on optimal sourcing. We've had to work towards -- with accurate data, it's easier to change mindset. Once people appreciate and understand the numbers, you are able to, therefore, work with the mindset. Historically, sourcing decisions across our business, across our networks were made primarily on ex works price. So you would source the product from -- you say, I'll sell it for me from Plant B because commands a better price for me. So number one. We've changed that mindset because with the ex works, if you split it with accurate data and accurate information, if you are able to understand the variable cost per product, per site, we are then able to see what is the actual contribution margin that you are bound to make from each of the operational sites. And you'll see there from a decision where you would have been in Plant B sourcing, you then quickly are able to make the right decision by changing the mindset. It comes with the fundamentals of having the right data available. So we then changed the mindset from sourcing using ex works price to sourcing contribution margin. The third lever. This one talks to the sales and distribution. we are competitive by design. One of our structural competitive advantage, ladies and gentlemen, is the strength and the flexibility that our sales and distribution team has backed up our geographical footprint and that we are able to use multiple sourcing nodes nationally and provide our customers with a high level of supply consistency that I believe none of the competitors in South Africa can replicate. If you're in the Western Cape, you'll find our product. If you are in Port Elizabeth, you'll find our product. If you are in the Northwest, you'll find our products. In each and every region of South Africa, you'll find our product where we are most competitive. We will supply it for you. So from a revenue perspective, this footprint enables us to achieve 2 critical advantages. The first advantage is that as a construction company, you are able to say when I partner with PPC, I've got security of supply. Because in our industry, reliability wins your contracts. A guy that is doing a port in a power plant or a power station in German, he wants to be sure that when there is power outage in your plant, where is sourcing his product from Alcoa using an example in Kimberly area, you are able, if there is a power outage in Alcoa to source the product from your nearest plant and he's not going to fail in doing his project and his port. So with the geographical footprint, therefore, you are able -- for PPC, we are able to leverage from that. So our distribution base reduces the so-called single point risk of supply and as such allows us to guarantee availability of supply to our key account customers, especially a major construction site where there are penalties if you fail to supply. And as such, there is less, therefore, regional disruptions impact that will be felt by our end consumer. It also helps to strengthen relationship, obviously, and it retains the customer, and it makes our pricing resilient. We don't fear to put a price in a construction site because it comes with premium service delivery. It comes with premium supply of product quality that no one can doubt because it is a PPC strength guaranteed product. Secondly, it also helps us in as far as our route-to-market efficiencies in that our proximity to most of, if not all the construction sites, be it in Gauteng, Western Cape that you may find or in Limpopo, we are able to be there, perhaps be able to offer a price of a product landed to a customer at a reasonable or what you call acceptable price because the lead to lead distances makes it able for us to compete on any projects as well as our optimized logistics solution, which Ernesto has covered just before me. The fourth one, it talks to product mix. This is one of the most powerful drivers of contribution margin. Margin expansion does not only come from pricing. I've said that, and will continue saying that day after day because that's what we believe and that's what we've seen giving us the results. We can also get better contribution margin by shifting your product portfolios and your offering to specific customers. And you'll see what we've done here. We've just taken an example of a typical retail product portfolio across the whole spectrum of products that we are offering. You'll see that we have more -- the 52 and the 42, this is what we call the high-end premium products, the high-quality strength products. And that's what we are offering in the retail space. It gets even more concentrated and intense when you're coming into industrial and construction space. We've done this intentionally because these are the products that are key in locking relationship with customers because the construction site is not so much sensitive to a mere discount or a price that you're going to give you want reliability of supply and strength guarantee in your offering. And we've done a lot of those, and there are even more examples that I can offer to you guys. And this has been a deliberate mix strategy that helps us not to have leakage when it comes to the value proposition to our shareholders. When I was outside, I had a discussion with one of the investors, he asked me, how is the infrastructure projects outlook in South Africa. There's a lot of positivity. There's a lot of commitment by government. There's a lot of excitement that we see. Government has declared ZAR 1 trillion worth towards infrastructure projects. That excites us over the next 3 years. And when you unpack it, we've realized that the majority of such project spend, it's highly intense on key infrastructure that demands cement. And it's key infrastructure that demands cement, not just cement, but high-strength cement. If you unpack it, you'll see that there's going to be about 40% of the ZAR 1 trillion that is going towards road infrastructure. There's about 20% that goes into energy, the wind farms that you see on the right. It's exciting because it's in the Western Cape region. It comes at a time when we are saying we're also going to revamp our capacity and put in new kit RK3 project that you're going to see tomorrow at a Riebeeck site. It wouldn't have come -- this wouldn't have come at any other perfect time. It also talks to the water. We've got water issue and water supply problem, infrastructure that needs to be revamped in South Africa. It talks to that, and this requires concrete pipelines for precast concrete suppliers that requires high-strength cement. We are there to provide that solution. So we will be, therefore, the partner that South Africa requires. It also talks to road infrastructure. There's a lot of projects that are coming in. There's also upgrade projects that the AXA has put up, which is airport company South Africa. They have put up around ZAR 22 billion commitment towards an upgrade on the Cape Town Airport. This is just an upgrade. There's also other projects that are coming in, which are also linked to the airport infrastructure. In the Western Cape, currently, it's in the stages of environmental impact assessments studies, and it is set to be rolled out in 2028 and beyond. It's to the tune of ZAR 20 billion for the airport in the wine lands area. So it's opportunities that are waiting for us, and they come in perfect time for our RK3 project that we're going to commission next year. So opportunities are plenty. Infrastructure projects of this nature wouldn't have come at any other perfect time than the time when we have our capacity ready to supply. So as PPC, we are structurally well positioned with capacity, expertise and footprint by design to participate in this next stage of infrastructure projects. I hope it answers the question of one of the colleagues earlier on who asked the same question. In closing, ladies and gentlemen, we are to continue sustaining the top line and ensuring that we maximize the contribution margin. If there's anything that you can capture this morning with regards to what I've spoken about is this summary of the levers that we're going to touch on while we ensure sustained top line as a cement producer in South Africa, dominant cement producer in South Africa, leading cement producer in South Africa when it comes to service delivery as well as quality. In so doing, we will make sure that we are competent when it comes to the on-time delivery. We will leverage from our geographical footprint and provide you the product mix that is application-specific and be fitting the requirements of your construction site or your building solution at home. We will use the proper customer channels, and then we'll make sure that we are also integrated in terms of our sales and distribution and interacting with you as our customer and strengthening our relationship with you. Together, these initiatives will form what I describe as the agility and the flexibility that you'll find on a PPC that is out there to offer you more. As it is said, there is more that we're going to offer as PPC in our turnaround, watch the space. Thank you. I've reached the end of my presentation. I'll hand you over to my learned colleague, Ndima, I'm going to -- I'll hand you over to Debbie for now. Thank you.

Thank you. I just wanted to give you -- just make sure everybody knew what the process was. Ndima will do the next section. It's about half an hour until 12:30. And then we do have lunch. So for the people online as well, we will start again sharply at 01:30. For the rest of you that are enjoying lunch at this beautiful venue, it is informal sitting. There is some standing cocktail tables as well as some sit down. Please just make yourself comfortable, mingle with the management team, et cetera. So after Ndima is finished, you can just make your way out. Thank you.

Still the morning. Good morning, everybody. It is my pleasure to be here for the first time, by the way, but been there around with the PPC Group. And it is also the first time that we'll be unpacking this business unit, PPC Zimbabwe, a very core asset or part of our business. I will be sharing you very interesting slides that talks to, one, the value that we are extracting from this business; and also the potential that it has. I know that Zimbabwe is, call it, that black box that there are some people may actually want to pick, but I'm actually going to be sharing with you what the real numbers are from that business. The reality is that Zimbabwe has adopted a multicurrency model and PPC Zimbabwe is actually a U.S. dollar business. Over 90% of our sales are in U.S. dollar. And just to give you a perspective, February, actually, it was about 98%. We are required to keep some zig for government transactions such as paying some of the taxes and ZESA, the utility, power utility in Zimbabwe. Very, very attractive market, in my view, in the southern region of Africa. PPC Zimbabwe has a high market share in Zimbabwe, around 55%. And for us, of course, market share is important, but not as important as contribution margin. We have a national footprint, the only cement player in Zimbabwe that has that. And that national footprint is made out of 3 plants. We've got a clinker plant in Colleen Bawn, which is about 180 kilometers from Bulawayo. We've got a milling plant in Bulawayo, another milling plant in Harare. Those milling plants are strategically located to be closer to the markets that we serve. In terms of the market, I must say that the GDP in Zimbabwe is on a positive side. Yes, the last time we saw a negative, call it, growth was around COVID. And at that time, there was also a drought in the country. And we've actually seen growth in GDP since then, driven by one of the sectors which PPC plays a part in, which is the construction sector. That growth is about close to 30%. And it's really driven by a backlog in infrastructure in the country, be it roads, housing and so forth. And of course, the moment you talk about roads and housing, you do talk about cement and that cement has to be good quality. This slide is, actually, when I was going through this, I realized the importance of a leadership tone in a business. Leaders can either break companies or build them. I do not think that there is a space for being sitting on the fence when it comes to these things. There's a before picture and the now picture. And this picture, you will see a lot of these are about putting a foundation that is critical, a foundation that is free of cracks, a foundation that sets us up for success going forward. This business was actually run under what we used to have. We are used to have PPC International and also we used to have PPC South Africa and Botswana. These parts of business were actually run almost independently. In Zimbabwe, obviously, we had the local team there that was not really aligned to what group was doing. And the Managing Director was actually doing what he thought was right in Zimbabwe. And I can tell you he wouldn't be here today if the before was still existing today. That means I wouldn't be here. I'll be sitting in Zimbabwe just running that business. And in terms of key performance KPIs, were not aligned to what the group was actually doing. And of course, in terms of the Board, there was a bit of a difference at that time. I can say right now, the Board in Zimbabwe is inclusive of the group executive members. So we've ticked all these. And I must say it's exciting for me to see a true integration of PPC Zimbabwe into this group because this can set up perfectly for more results, good results from that business. You'll see what I'm going to share with you. Some of you, you're probably going to be asking yourselves, "Wow, why did it only come now?" Of course, it's information that you're going to have now, and I'm happy to say there's more to come. I must say also that there have been bad habits -- corporate habits in Zimbabwe, PPC, almost factions and all that stuff, which is something that I have no time for. There's only one faction at PPC and that's PPC Group. The moment somebody aligns with a particular leader is actually that person who probably is going to have to give us space because we just do not have time to entertain factions within this group. Matias had this slide during his presentation, similar concept to Zimbabwe. Our strategy is to compete and be competitive. There's a lot of things that we have to do internally before we can look outside. Of course, there are things outside that needs to be taken care of, but there's a lot of potential within PPC Zimbabwe that can be unlocked to ensure that we remain competitive in that market. Technology is one of the areas that in Zimbabwe, we are looking at. In fact, our main aim there is to optimize what we have. We have a clinker plant in Colleen Bawn, that has a certain rated capacity and actions that we are taking today, we are looking to actually run just above that rated capacity. Through partnerships, very strategic partnerships with one of the cement players that is well known and respected in this space. We've signed an operational technical agreement with them and we are at the assessment stage and ensuring that we get the skills and knowledge that can help us to up the capacity in Colleen Bawn. And that is very, very key for us because Colleen Bawn is the only clinker plant that we have in Zimbabwe. And therefore, anything over and above what Colleen Bawn can produce, that means purchase clinker, and you'll see when I'm unpacking the variable cost slide that purchase clinker is one of the big items in there. People, extremely important. In fact, integral part of this turnaround. Without people, this cannot happen. Without good leadership, this cannot happen. We need skilled people. And I must say in Zimbabwe, we have a problem that is similar to South Africa, but I think South Africa is in a better space. So I'm going to explain that a bit. Cement skills in Zimbabwe. So there's about 8 players at the moment in Zimbabwe. Six of them are Chinese and two of them is PPC and the local player, Khayah former Lafarge asset. These -- if you look at that market, if I have a position, very, very difficult to fill it if I have not developed people within. The whole BBB -- it's called BBB, either you buy, you build or you borrow skills. In Zimbabwe, you don't go around and pick up skills in the market because the Chinese players will have our own Chinese people that are there working in there. Khayah, basically, they get people from PPC. As a market leader in that market, of course, one of our responsibilities is to make sure that we develop our people, identify talent, develop them. And of course, some of them will make -- will leave. And if they leave for good reasons and for growth, it's good for the industry as a whole. Culture is another one, which is quite important for us. And really, it's about the ways of working. And I did -- when I started, I did talk about the silo mentality that was there. What is key for us is to align with our fundamentals, accountability, ensuring that we're not wasteful with the resources that we have. In fact, a lot of non-core expenses on our G&A has been attacked in a hard way, meaning that we've reduced that a lot to make sure that we take care of our cost structure. This slide is one of the slides that is quite interesting. This slide talks about the delivery that we are already seeing, the value that we're already extracting from that business unit. Let's talk about the growing EBITDA. We've seen a 28% growth. This is a 10-month update this year, 28% growth from last year. And here's something that is quite key. The previous year, which was the first year of this turnaround, there was a 29% growth. So that 28% is on top of the 29% that we've seen in the previous year. Again, it tells you about sustaining things, not just do things for a year and you disappear or you disappoint. Of course, this comes with margins that are expanding, and that's very good to see. In terms of cash flow generation, it's really -- it is gaining momentum. In the last two years, we have declared dividend of about USD 49 million. When I say gaining momentum, the next statement I'm about to share with you will show you how this momentum has been actually seen. Before the two years that I've just shared with you, the 10 years, going back 10 years, it was only USD 33 million that was declared in dividends. And ladies and gentlemen, if that does not talk to momentum, I don't know what momentum means. The third one, of course, is very, very important also. This is a debt-free entity. So therefore, you don't have to worry about interest rates and so forth. But what this gives us is an opportunity with excess cash is either we continue to declare a dividend or reinvest some of that money into our assets into our operations in Zimbabwe. There is definitely more to come here. There are opportunities that are there. And I'm really, really looking forward to seeing this picture becoming much more better and better every time we come and update you. This is the cost structure in our business in Zimbabwe, and there are opportunities. And I do need to unpack some of these, especially the variable costs. Now inbound transport, you'll see it's on the high side of things, about 29%. In fact, it's the highest. And there's a reason to that. And let me explain it. We have a clinker plant in Colleen Bawn, a milling plant situated in Bulawayo, 180 kilometers away from the clinker plant. We have one in Harare, which is about 510 kilometers. What that means you produce clinker. You've got to put that clinker into a train or via rail or road trucks. They move that clinker to these milling plants. Of course, that number is going to be high. Of course, it doesn't help what we're seeing right now in the world from a fuel point of view. And our team is focused on ensuring that we negotiate hard and make sure that we are still able to manage these costs. Of course, the other one was to also in-source the management of logistics, similar to what we've done in PPC in South Africa. And what I like about this integration is the availability of resources from a group to assist the team in Zimbabwe. We have a very competent logistics manager at the group level, who is with us in this journey to ensure that we get value out of these activities. The other one is power. Power is not only expensive in Zimbabwe, it's also not reliable. We have a lot of ZESA stops. ZESA is basically the power utility in Zimbabwe. We have a lot of ZESA stops that unfortunately are disrupting. This is a game changer. We have entered into a PPA with an independent power producer in Zimbabwe, where we will be putting up a solar plant in both of our plants in Colleen Bawn and Bulawayo. And we're going to see not only savings on the tariff side of things of about 50%, we're also going to be seeing, because there's going to be less disruptions in our power, we'll see more clinker being produced in Colleen Bawn because clinker in Zimbabwe is like gold. The more clinker we produce, the better for us. Of course, clinker -- [indiscernible] clinker is another one, and we have to make sure that we look at what we can do to manage the clinker factor in our products. The introduction of slag in our product has seen clinker factor for one of the products being reduced by more than 10%. And of course, what that does, it gives you more clinker to produce more product for yourself and sell in the markets where we operate. The production, of course, of clinker in Colleen Bawn is very, very important. And I did touch on this in terms of the strategic partnerships that we have entered into. And is exciting to see currently, I think Ernesto touched on this, how Colleen Bawn has been turning the corner from a clinker production point of view. We've got to make sure that continues because the more clinker we get out of Colleen Bawn, the better our contribution margins by far. The turnaround is still at the early stages. And some of these here in these pillars, I've already touched on them. I will not dwell much on those that I've already touched on. If you look at the operations and supply chain, we can never, when it comes to operations, not talk about clinker production. And we are seeing improvements in that space, which is fantastic. Sinoma, we are partnering with them. In fact, that partnership beyond just assisting us to ensure we improve our clinker production. We are tapping into skills and knowledge transfer because we cannot miss that opportunity when we have very senior and very skilled personnel working with our teams actually in shifts and so forth. Of course, we have translators that are there managing the whole thing. It's very, really -- it's a journey that our employees are enjoying. And the lesson is more, we actually stopped producing the 22.5 product in Zimbabwe. We used to produce about 60,000 tonnes a year of that product. We've given it to competition to actually take care of because of the contribution margin that was not that great. And some people may say, now ways, we cannot move away and let go the 60,000 tonnes. We've done it. And we've gained that from other products that actually have a higher contribution margin, such as [indiscernible]. We are driving customer collections, but some people will refer to self-collect or own collects, meaning you charge them your X to X, they just come and collect the product. In Zimbabwe, there's a lot of our transporters happens to be our customers. So I'm pleased to actually say in this area, we've seen a wonderful progress. In the month of February, our on collect actually moved to about 22%. And then in this month of March, we're above 40%. And of course, the customers are going to have to take care of their transportation needs and so forth. All we want to do is to make sure that you get a very, very good experience when you arrive in our plant to collect your product because if I give you a VIP or priority service, you're going to come for more and make sure that you come and collect than rely on delivered rates. I did touch on the introduction of slag, which is really doing wonders for us. From a commercial point of view, this has been said a lot, contribution margin, contribution margin focus. We don't just focus on volumes. If you do that, good luck to you. Pricing discipline is another area for us that we focus on. Margins are quite good in Zimbabwe and the pricing discipline has to stick. You can't price your product and go and introduce discounts and so forth and erode that contribution margin makes no sense. And of course, in Zimbabwe, there's a huge number of -- in fact, we have been driving this a lot, huge number of our customers are cash customers. Basically, they come and pay, we deliver or they come and collect. We have a few customers, which is the big ones that are on credit and even the terms, they are very, very short in terms of when they must pay for that. The cost mindset is a big one for us, which is more internal, looking at our G&A cost, we've done some actual work in that space, ensuring that the non-core costs are taken care of. And of course, looking at returning some of our major big contracts. We don't have such a thing called evergreen contracts at PPC. We've got to make sure we review and ensure we get a fair rate from whoever has got the service. Before I conclude, maybe coming back to this. Over and above this, we are looking at considering investments that will be considered to ensure that we secure and improve the dividend flow to PPC Zimbabwe. Very, very important for us to ensure that the sustainability in the dividend flow to PPC Group. In conclusion, opportunities are there. And most of them, they are internal. Our focus is to -- on things that we can control and influence, and that has been working very well so far. And there's still more to be unlocked. I really believe in that. I am on the ground there. I can see what is still coming. It's a wonderful picture that we have. And the reality is that we are in a growing cement market and the cement competitive landscape in Zimbabwe is changing. And ladies and gentlemen, we are ready to compete. We will compete in that market. Thank you very much. [Break]

Welcome back to everybody in the room and online. We've got an exciting afternoon. It's all the strategic stuff. Before we get going, just to remind people about tomorrow, if you're coming to the vineyard to be there by 7 to leave by 7, Michelle. The morning registration in Riebeeck starts at half past 9, and we start the presentations by the CEO at 10. We should be done by half past 12. There will be lunch served between half past 12 and half past 1. Obviously, you're welcome to leave as you need. The bus will leave, I think, between half past 1 and 2, Michelle. Yes. So if you're wanting to get back to Cape Town. So that's a bit of logistics for tomorrow. We just saw the RK3 evolution. So Horacio Ardiani is going to take you through the RK3 and a few of the other strategic projects. Over to you.

Thank you, Debbie. Good afternoon, everyone. After these images, I do not know what else should I tell about RK3. But believe me, it's not artificially intelligent. This is real, it's happening. So a real pleasure to have you guys here today to talk about some of the PPC strategic points -- projects. Today, we are going to talk about 2 different work streams. First one is the most important one, the one that you just saw the video is our new RK3 plant in Western Cape. And we will talk a bit about renewable energy that some projects that we are working on. Just a reminder, remember that last year, also at this venue, we announced the signing of this project, which is an EPC project signed with Sinoma. Sinoma is -- Sinoma Overseas is, I would say, the biggest -- the largest international company in this industry. And we signed that one for circa ZAR 2.4 billion project. It's an EPC turnkey fixed price for that cement plant. And we also have a non-EPC cost included in our budget that was approved last year by our Board of Directors of -- in the region of ZAR 600 million to cover for non-EPC, things like switching station, switcher station, piling, et cetera, et cetera, project cost included in order to manage this project, things like that. This plant will replace the 2 existing cement plants, one in Riebeeck and the other in De Hoek. Those are aging plants that have been with us for 60 years or so, needed heavy investment in order to make them compliant. So we decided to see whether we can put this project together. And finally, it was approved. With regards to the renewable energy, in 2024, we signed 2 embedded projects for our inland facilities, Dwaalboom and Slurry. We will talk about that and also some others in SA, but also 2 projects in Zimbabwe for our facility. I think Ndima touched on those. We will talk about that. There are more projects in our pipeline, but we only talk about these 2 today. With regards to RK3, like I said before, we are going to go from 2 existing old plants to 1 newly integrated state-of-the-art plant at Riebeeck. We will come down from different numbers of equipment, basically 4 kilns that we have now -- old kilns that we have now to only 1 kiln with a bigger capacity, better technology, and that gave us the basis for our business plan that was cost efficiency. We will be better off on variable cost, fixed cost and not to mention on the environmental aspects. I mean massive, massive difference from what we have now. Those were the basis for our business case, cost efficiency. We are proud to report to you guys that as of now, this project is coming very well, safely. So we have spent almost one year in the project with 0 LTIs, more than 300,000 man-hours poured into the project as of February, not to mention all the other people that are working outside Riebeeck, people in head offices in China, people manufacturing this equipment for the project, 0 LTI whatsoever. So we are having a very good relationship with our partner, Sinoma, in that regard. It's a very challenging situation because project schedule is very tight. We will speak about that. So we will have a lot of people working at site in different areas. At the same time, it's going to be challenged. But we have already beefed up our internal safety officer. So at Sinoma, we have increased the number of people to supervise all those activities, but it's something that we need to be very, very careful going on. We are proud to report that we are on time and on budget. So it is -- the project is running well in those 3 aspects. With regards to the timing of the project, last year, at Cape Town, we signed the project with Sinoma. After short but tough discussion with our colleagues from Sinoma, we came up with a nice agreement with them in March, late March last year. We declared a commencement date after -- in June, early June, after receiving the bonds and paying the down payment that we needed to. And during last year, we overcame some of the challenges, some of the risks that we have identified earlier on, but then during the course of the initial months, some of them transpire. So ranging from the soil bearing capacity, we have envisioned a certain soil bearing capacity that then when we did the detailed analysis were not that good in certain areas. So we needed to do -- like you saw on the video, we needed to drive some piles, which we did. We concentrated on the critical path in order to get rid of them at the soonest while the design were progressing and while contractor were mobilizing. So we work together with Sinoma. We helped them to identify local contractors. There are plenty in the country. So we use them earlier on. We set up a batching plant jointly with Sinoma, and we overcame that one sometime in August -- sorry, in October. Then we concentrated on the noncritical areas of the project. We overcame that one. By the end of last year, all the piles were gone, were completed. Same thing with Eskom with having enough power to feed this new plant. So we invested a lot of time with Eskom. This is a non-EPC portion of the scope of work. It's not including on Sinoma's scope. So -- but we handled that one with Eskom. It's always a challenge, but Eskom came along very well. So the design is ready. Contractor has mobilized to site in January, and you will see the progress tomorrow. So we are okay on that one. If everything goes okay, the new switcher and switching station will be online at the end of this year. Like I said, project remains on time. So we are looking at the first clinker by first quarter of 2027, and then we will follow with cement by second quarter of 2027. Those are the dates. And as I said, we are working, we are partnering with Sinoma. We are helping each other in order to make those dates. So still on track. With regards to cost, like I said, we are doing fine. We have invested almost more than ZAR 800 million as of end of this March into the project. And these are the cash that we envision for next year or next financial year and FY '28. So we are on track on that one as well. Remember that PPC took the decision last year to hedge this project. So we are fully covered of any currency valuation, ups and downs. With regards to the solar projects, like I said, we are going to speak now about 1 project or rather 2 projects in South Africa. We signed those embedded projects. Those are behind-the-meter projects are situated in Dwaalboom and Slurry facilities. We signed it on 2024. Some of you guys who were helping the IPP with financials here. And we started -- or rather the IPP started producing energy in Dwaalboom back in September and in Slurry in November. Since then, we are enjoying that benefit. We have a reduction in the region of 15%. And our good friend, Ernesto, is enjoying that saving now or since then. We are also looking into other projects. We have still appetite for more projects in SA. And probably next year, we can announce similar results in that -- in this aspect. We are also looking into Zim. Zim, like Ndima says, Zim is, I mean, it's a very important market and has a very important influence -- the energy has a very important influence in the cost structure. And the saving that we are going to have with these 2 projects. These 2 projects are -- the PPA has already been signed. We are expecting or rather the IPP is expecting financial close any time next month. We have already mobilized -- the contractor has already mobilized to the different sites in order to progress with the initial works in terms of getting the basics to develop the design and also trying to procure or secure the panels, all the equipment earlier on ahead of the financial close using the equity. The equity portion of that project was already secured last year. And we are thinking of having that one next year already in operation, and that will give us a boost of 50% reduction on our energy cost. In sum, on RK3, like I said, all the mitigation measures were in place. We put some of them, not all of them crystallized, but those that we need to face, we handled that one. So the project is on track. It will be fully operational next year, financial year '28. Business plan was developed under a conservative way. Remember that this project will deliver 1.5 million -- depends on the mix of the products, 1.5 million tonnes per year of cement. The market currently is tracking 1.1 million in the area. So we will have more ammunition to go and conquer more markets. And for the time being, we are keeping the 2 old babies serving the market at De Hoek and Riebeeck. Riebeeck will soon be disconnected because we need to give way for RK3 in certain areas. But for the time being, De Hoek and Riebeeck are fully operational and serving the market as we predicted. On the renewables, we are delivering -- we have delivered some. We are working on others. And like I said, our portfolio includes other projects on efficiency, on more energy and also on capacity, not only in South Africa, but also in Zimbabwe. We only talk about these 2 important projects today. Thank you very much.

All right. Good morning, everybody or good afternoon. Before I start, I'd just like to remind you of the program that Matias showed you earlier, and I'm happy to report after me, it's Paulo. So hang in there. This almost is over. All right. Thanks very much. I would just like to introduce this section of the presentation by showing you a snapshot of how the Awaken the Giant strategy has delivered on 2 key capital allocation metrics, those being the dividends to PPC shareholders and ROIC. So dividends or share buybacks commenced in 2023 after a long period of financial stress. As you can see, from FY '23 to FY '25, there was a 37% increase. The FY '23 distribution was effected by way of a share buyback as PPC was trading at about ZAR 2.25 at the time, and we believe that to be significantly undervalued in the better interest of shareholders. The red bars on the slide reflect the flow-through of dividends received by PPC from PPC Zimbabwe and the gray bar in FY '25 is the first dividend paid from the SA Group since 2016. We have not shown a special dividend on this slide. It was about ZAR 520 million in FY '25 as we're trying to just depict normal ordinary dividend flows to shareholders. On the right-hand side of your slide is ROIC. And again, the group ROIC is shown now from FY '24 through half FY '26. The reason that we're starting on a different time as you may remember, the hyperinflation environment in Zimbabwe prior to FY '24, and it was just a hopeless case to try and do a ROIC on a hyped group balance sheet. Again, the trend is very positive with an increase of nearly 7 percentage points over the 2 years. This is just to make the point that the way management is incentivized on both short-term incentives, STI and long-term incentives, LTI results in a focus on the right metrics for sound capital allocation. The business objectives for STI are consistently safety, EBITDA, EBITDA margin and free cash flow generation. And very importantly, 50% of the LTI target is ROIC. Focus on the above by management promotes the generation of capital and careful consideration as to its application, including maintaining a conservative gearing level. Detailed forward planning over a 5-year period promotes consideration importantly of both short-term results and long-term sustainability. Dealing now with the capital structure. We use a standard approach for ROIC. We take EBITDA less depreciation to get EBITDA. We take tax off at the statutory rate to get NOPAT or net operating profit after tax. On the invested capital side of the equation, we use a standard sort of operating approach, being all assets less liabilities. Liabilities exclude debt. Importantly, cash -- sorry, impairments rather, are added back after depreciation so that we don't essentially cheat on the ROIC by impairing assets all the time. We also then use the average of the open and the closing balances. Obviously, as I'm sure you know, the assets that we include in the calculation exclude assets under construction or AUC. And in our case, that would be the amount spent on RK3 as they've not yet begun to generate EBITDA. And the target is to exceed the group WACC. The criteria, which is important -- first of all, let me start by saying, I hope -- it goes without saying, I hope, but good decisions cannot be made with bad data. Legacy information has been improved and teams with excellent business knowledge enable confidence in forecast. So in terms of the absolute criteria, WACC is distinguished by business unit and IRR must exceed WACC. ROIC must exceed WACC for the first 5 years after CapEx is fully expended and payback of less than 5 years from the time we write the first check. The funding leverage works as follows. We take it as a completely separate decision. Once the project capital -- we rank the -- rank the capital, maintenance will generally rank ahead of expansion capital. They're ranked in order of which they meet the criteria and then the funding is solved. We do not -- the benefits of gearing, we do not take part of the capital allocation criteria for the actual capital itself. If the required cash funding can be secured without over gearing, the project should be approved. I'd like to talk a bit here about how the 2 very distinct pillars in terms of how we manage our capital. We manage our capital, the South African group in one distinct pillar and pick Zimbabwe as another distinct pillar. And there are 2 key reasons for distinguishing it. First of all, the risks are very different. Secondly, the gearing -- yes, the gearing structure is very different. So in South Africa, we have a target gearing of net debt to EBITDA of 1.3 to 1.5x, whereas in Zim, it's very -- there's very limited fundraising capacity, hence, the complete distinction between the 2. What we just thought it would be useful to show you is the capital allocation in FY '25 for both pillars. And I'll start with the red bar on the left-hand side and work around in clockwise rather. So we spent on maintenance and compliance capital ZAR 222 million. Then there was the special dividend to shareholders from the sale of Rwanda, I mentioned that slightly earlier of ZAR 521 million. There was a 100% flow-through of the Zim dividend to shareholders, ZAR 244 million. There was an ordinary dividend to shareholders of ZAR 30 million, repayment of debt, ZAR 275 million and cash retained of ZAR 720 million. Just to remind you, we had approved the RK3 project in February, and we knew the cash was coming -- was needed to go out the building. In Zimbabwe, again, in accordance with its policies, we had maintenance capital, ZAR 147 million. Dividends to shareholders, ZAR 244 million that you can see flowing out to your good sales on the other side, and we retained cash of ZAR 118 million. Its policy as opposed to being in the gearing ratio is more driven by a forward-looking minimum cash amount that we target. Looking forward, the 2-pillar policy, we have every intention of maintaining it. And the Board, in line with the policies will consider the flow-through of the Zimbabwe dividend in June. To conclude, we've improved forecasting quality, and we've got increased confidence in delivery. Our net debt to EBITDA is in target levels in FY '27 and below target in FY '28, expected to be, right? And this means that in terms of the policy, flow-through of Zim dividends subject to Board approval is expected to continue. I'd just like to make some last comments on why I'm so taken with this topic of capital allocation. It's really for 5 reasons. We're generating strong cash flows. We're conservatively geared. We have lots of opportunities. We have a robust capital allocation model, and we can apply it with confidence. And I think that's really why I love the topic of capital allocation. Thank you very much.

Thank you, Brenda. Good afternoon, everyone. Before I start this section, let me frame it. Like I did last year, I will start with the importance of cement and cement itself and bridge into the industry sector and valuations and then bridge back into PPC. The core message of the section is that when -- in cement, when the fundamentals are right, value follows, and I will try to explain why is that. But starting with, as I said, starting with cement. What does it mean when we say that cement is a foundational development input. Concrete made possible by cement is the physical backbone of economic development. That because it's intrinsically connected to infrastructure and infrastructure investment is deeply connected and one of the most of the highest impact levels on development. The World Bank's metadata analysis in terms of the impact of infrastructure in economic development is highly positive and correlated. It has a high impact in economic output, employment and trade. States, governments and even the capital private need the infrastructure because they cannot achieve the outcomes without it. And this takes us to that point in red, which is why is it cement is produced in the vast majorities of the countries worldwide. In 2024, 4 billion tonnes of cement was produced globally across 160 countries in the world. Few industrial products have this kind of footprint. If I put this into perspective, when we look to other industries and other capital -- highly capital leveraged industries, we can see that, for instance, the number of countries with refineries, active refineries is around 100. And coming back to South Africa to a topic that is close to home and currently debated, the number of countries worldwide that produce steel are less than 65. Just as a comparison to put into perspective, more than 160 countries worldwide producing cement. So the cement industry might not be the most fashionable, but is a fundamental important one. It's not a cyclical industry like other commodities in the sense that the drivers are structurally linked to economic development. Economic growth can't happen without it. So although there is short-term cycles in demand and there's volatility in demand, the long-term perspectives related to cement are attached to long-term cycles. From this context, let me move into the industry, the scale of the industry and the main players. The global cement industry is quite large, is scaled and currently is growing. In 2024, it was valid at USD 400 billion, and the projections show a 5% compound growth over the next decade. The growth on which it is supported, again, is not a short cycle. It's built on megatrends, population growth, urbanization, but also the decarbonization cycle. According to the World Economic Forum, global urbanization is expanding at a pace of an equivalent of adding a New York City every month. So when we think about this, where are these drivers mostly found, where the population is growing, where the rates of urbanization is higher, exactly in Africa. So urbanization locks long-term demand. The decarbonization and the sustainability will also be increasing part of the value chain of the cement industry with new technology and heavy investments in that structure, but they will be still part of the cement industry. In the right chart, we can see that it's highly scaled up. The top 50 producers of the world almost have 80% of the capacity. When we look at the map, we can see that in dark gray, we have the cement producers. By far, CNBM, which is a parent company of Sinoma and Conch are the biggest producers. And this capacity is largely concentrated in China. Then in dark -- in light gray, we have the European multinationals. Those are multinationals in the sense that they have the capacity expanded across all continents. And in black, we have American players. And at the -- almost at the end, we will see the first African player, Dangote, the biggest player in Africa and PPC, which occupies the position 65 worldwide. But you can see by the change of the scale of when PPC appears at 65% compared to the others, how concentrated the capacity is, although some of these players have a lot of capacity concentrated still in China. But I will get into that because some of these trends are actually changing at the moment. Just to summarize the first 2 slides, why cement attracts capital. It's because it's strategic in essence. It's essential for economic growth. So structurally, the demand in the long term is assured. The local production is really important because of the high economic multiplier into the supply chain of the countries. The cement assets have a long life. They have long-term investments, continuous investments, but it's important to say they can have long assets, but only the competitive assets will deliver value generation over time. When the assets are well located, well invested, well managed, we will have the point 4, durable cash flows and high returns. Critical is this point number five, is that returns are not driven by demand growth alone. And this is one of the points that Matias made previously. They are driven most by market structure, competitor behavior, asset quality and management. Those are the main drivers of the returns in cement. So the markets with the more rational capacity and disciplined operators are the ones that have the best returns. They attract capital and they attract premium valuations. That's why we have to say, and that's why it's the slogan of this, that fundamentals are the part that secures value and not demand. The global cement industry is increasingly in confidence, it's investing, but we can see that it's very selective in choosing the strong assets. So as I said, it's important to keep this message, the distinction between demand and the fundamentals because when the fundamentals are right, earnings come, cash generation comes, returns are generated and that determines value. So when we look at this structure that we have here, let's start on the left-hand side, which are what we perceive as the core drivers. Operational performance, quality earnings and accretive investment. If we look at them, we can see that they mirror what has been the PPC strategy and priorities. When we look to operational performance, we talk about fixing the core. We talk about the operation performance of the business. We talk about skills. We talk about organizational culture, we talk about accountability and a lot of the topics that were discussed today. When we talk about quality earnings, we talk about contribution margin that [ Bheki ] explained, chasing margins and not volumes or market share. The accretive investment is really important because it's what tied the short-term delivery with future competitiveness and returns. And here, I'm not talking about expansion, but about our core business. When these elements come together, they deliver strong cash generation and ROIC expansion. And in our view, when we talk about free cash flow generation and ROIC, we are talking about the indicators that reflect value creation, and they are the reference for investors. PPC with the strategy and the Awaken the Giant strategy have deliberately positioned itself in this trajectory and to follow these value creation drivers, which leads to valuation re-rating that we already saw, and we think more is to come. Now looking a little bit to what are the trends in the cement industry worldwide. As I mentioned, the first point is that we have experienced and we are seeing an increase of M&A deals in '24, mostly in '25 and '26. In '25 alone, the global cement transactions were above $5 billion in value at an average EV to EBITDA multiple of 8.9x, which is a very high number. If I look to the #2 in terms of trends, the Chinese players have started expanding and they have started expanding at pace, with the Chinese market stabilizing in terms of demand, the acquisitions and greenfields have started to scale at a fast pace. When we saw that first graph, the 2 biggest players, CNBM and Conch haven't really started that process. They are starting to embark on it. And then we will see [ Wuxin ] and other players like West China, where their expansion already started. And they're looking for diversification from the local country and growth potential and where they are focused and seeing the growth potential exactly in African countries. Number three is the emergency of local regional champions, especially in East Africa. They understand the local dynamics and there are groups that are trying to incorporate cement into their portfolio like [indiscernible] Group that have been present in some transactions in the last couple of years. Lastly, which is also a change of trend is that the global players, the Heidelberg cement, [indiscernible] , they are reengaging in M&A for the core business for cement because for a period, they were diversifying their investment in some lighter capital investments. And now they are reinvesting again in the core cement, mainly in the Americas, North America being the most attractive market at the moment, where a lot of transactions have been happening and also in South America. So I think the conclusion here is that the confidence is growing and the capital is following high valuations at the moment in the cement industry. Let's move now and zoom in into Africa and the Southern Africa context, where we have seen a lot of transaction happening in the last 5 years. This map doesn't include all the transitions, not comprehensive of all the transactions that happened in the last 5 years, not close to it, but just some of them, so you can see how diversified it has been in the last 5 years. The multiples, the EBITDA multiples between 2023 and 2025 have been quite high. We've seen transactions at 7x, 8x, 9x and even 10x EBITDA. So it means that when the quality of the assets is there, the market structure is there and the growth prospects are there, the investment is being deployed. These transactions -- before even going to the transaction, the profitability across these countries and regions is very different and the profitability of the players in these different regions is also very different. And again, not to surprise, it's not related to installed capacity. We look at Dangote, which has the highest margins in the sector, it's not operating at full capacity at all. It's actually almost close to 60% of the capacity and still having the highest margins. So the real differentiator is really the market structure, assets and management. The other aspects are the buyers, who are the buyers who are -- who is entering the market and who is being more active. So it's a very big mix of different players, the Chinese, the regional players. And the important part is that there's very different scenarios of -- between them. The pools of capital strategy and risk profiles are very different. We will have a CNBM and a Conch with a very strong balance sheet, [ Wuxin ] as well. And then we have West China with a completely different risk profile and balance sheet. So this transaction have followed different rationale, risk profiles and investment cases. And the way they fit in the strategies, and as I mentioned, the long life of these assets will make us a set if they were poor or winning strategies in the long term. Just to highlight one of the transactions into this point because of the long life of the assets, as I said, if you make the right decision or the wrong decision, it gets amplified. In 2015 -- in 2023, Lafarge was sold to Khayah, a local operator in Zimbabwe. Their assets that actually have been neglected for many years, and they had to solve for many years. The local player was looking to a quick turnaround, was very vocal about the turnaround they were going to do. 3 years later, that business currently is at business rescue. So the logic and the value of some of these transactions are very important to look into the details. For PPC and for the way we see it, this is kind of brings a conclusion on how the market is valuing cement assets in Africa today. And we can clearly see that PPC still trades at a discount compared to the values that we see here in this map. Well, to conclude, what does all of this means to PPC? All these topics that I just brought you today and understanding them and how important they are were key when we were designing and shaping the strategic road map for PPC. Getting the fundamentals right, the fundamentals will drive results, they will determine returns and the returns will determine value. So PPC explicitly defined that we would have a returns-first strategy. The decisions on operations, commercial, investment would be always filtered on if this brings quality returns, if it improves the free cash flow generation and if it improves future growth. This talks -- this first point talks to competitiveness, returns over any kind of scale ambition. The second one is about margin over footprint expansion, expansion of volume without margin destroys value. And then we need to combine it with the results that we are delivering now with preparing the results of the future. And that's why we were so fast in acting in terms of approving value-accretive projects like the RK3, keeping the capital allocation discipline. So it's important that while we are delivering now, we are already preparing for the future sustainability and the competitiveness of the future. So we can say in conclusion that PPC is deliberately aligned to these principles to what brings value and that our focus on margins and structural competitiveness and investment with capital discipline will position PPC for continuous growth and sustainable value in the future. Thank you very much.

Before you multiply PPC EBITDA x7, 8 divided by the number of shares and you run to buy our share, please give me 3 slides more. We have done that calculation, by the way, but let's keep it there. First of all, I would like to thank Sinoma leadership that has joined us. He's going to join us tomorrow. The Chairman of Sinoma overseas is with us today. And as we mentioned, since day 1 is a very important partnership for us, it is and will be. I hope that you have appreciated the presentations. I personally think that the team did a fantastic job. I see that you are all looking there, so I will go fast to this. You have been very kind with the comments during the break. Actually, also the conversations and the questions you brought during the break, they were very interesting. And I think they even help us to understand more what information you would like to have from us. And I think that, that is important. Of course, all what we have seen or all what has happened in the past 2 years in PPC has brought confidence and excitement. Internally, I can guarantee you that. When we look to the PPC share price performance, somewhere there, September 4 is an important day for me in 2023. It reflects from where we are coming from. And I think that the market is starting to price the improvement. But I would say starting. In 2021, this is after COVID and probably some of you remember that there was like a big optimism that the construction market was coming back. All the cement companies were doing very well that 6 months and people got very excited thinking that the external factors were the ones that were going to bring the results. Differently, we believe that now the share price recovery is based on earnings coming from better and sustainable fundamentals -- not just one external factor that probably was benefiting the sector and the company. Yes, we are coming from a period where PPC was doing poorly. As we already mentioned, we think that there was a kind of a misunderstanding in terms of the fundamental of the business for quite a long time. But recently, the trajectory of delivery and improved earnings, we see that the picture has changed dramatically. We believe there is more to come. And that is why I can say that the management team has taken their own investment decisions accordingly. On the right-hand side, linked to what Paulo explained to us some minutes ago, how we compare, how we position PPC alongside global cement peers in terms of enterprise value to EBITDA. Despite the progress we have made operationally and financially, we strongly believe and for us, it's quite clear that PPC still trades at the discount comparing to global peers. This gap matters. The market is acknowledging the turnaround effect, but we believe that it's not fully priced in terms of the scale of the growth and the opportunities that are ahead. So we believe that there is a clear path for further re-rating supported this time by real fundamentals. Well, you already know this slide. We introduced it to you last year in our Capital Markets Day. It shows the target of our plan and also is a guidance to the market on what we believe that is going to happen. We have updated FY '25 and FY '26. We are ahead of plan. We came somehow short last year in our guidance. But the long-term plan remains the same. The first phase is largely completed. There was a clear step change in the results, both in FY '25 and FY '26, the first 2 years of the turnaround. We are looking forward on FY '27 as a consolidation year. We are expecting ROIC EBITDA margin to perform around the current levels in preparation for the next step, which is FY '28, driven by RK3 becoming online. With RK3 and other value-accretive initiatives coming through, we see a clear path way to a sustainable EBITDA margin above 21% with ROIC exceeding WACC. We have no doubt about that trajectory because we come again does not depend -- it does not depend on external factors. We might have some bumps along the way. This is cement, and I was talking to some of you during the break. One day, you have a breakdown and things happen. But we are set for a compounding results and value creation. In closing, I think that is very clear that PPC today is completely different than the PPC of the past. We have rebuilt the foundations. We are restoring competitiveness, and we are now positioned to create sustainable value. Why we are confident? We are confident because the fundamentals are now under control. Technology. We are investing in our assets. Investment like the RK3 and process upgrades at the plant will lower cost further, improve our reliability and protect margins over the long term. PPC today has the right team. Of course, and you have witnessed this today at the executive level, but not only that, we have rebuilt, as we mentioned, the second layer of the management in the company. And we have put the right people in the right roles. Not less important, our alignment with the Board. We have benefit from a very professional [indiscernible] Board who has allowed us to interact in a very productive way, and they have been very supportive to us along the way. And sometimes it was not easy. I think that alignment with the Board and how we have been working together is another very important factor in the recovery of the company. Lastly, humbly, we believe that credibility has been built. We have said that internal changes could restore margin, strengthen cash generation and improve returns, and we have done exactly that. Trust has been rebuilt with employees, partners, customers and investors. The environment is completely different today than what it was 2 years ago. Rebuilding an icon is hard, but we are moving at pace, redefining the future of PPC is where the real opportunity lies. Thank you very much. We are going to open now ourselves for Q&A. So probably we need a couple of minutes of logistics to bring the whole team and probably to bring some chairs.

So I already have a few questions online. Should I start with that? Or should I start in the room, do you want to give it a go hold...

Go ahead...

So that people online can hear the question.

[indiscernible]. A quick question on your Sinoma asset review. My understanding is from past presentations that you've already done or been through a review of the SA assets and it sounds like you're about to start on a review of the [ Zim ] asset. How -- I suppose I'm asking how much of the potential further gains from here on the back of that Sinoma SA asset review? And then the follow-on from that is obviously, I would -- can you expect similar sort of gains out of the [ Zim ] asset? Maybe if you can just unpack that whole Sinoma review for us in a little bit more detail.

Well, you're asking us a lot of calculations that at least I don't have it in mind, but let's go to the concept. Yes, you're right. But we are not only -- our partnership with Sinoma that we announced almost 2 years ago. And it's not only about an assessment and about the assets, but also about the operations. So what we are doing with Sinoma, what we have been doing with Sinoma in South Africa, not only has been the asset evaluation, but also how Sinoma could support us in terms of the operations themselves. This is what we are -- we started to do 2 months ago in Zim. The Sinoma team is already there and has produced already the first assessment of our operational opportunities in [indiscernible] and ultimately, it's going to come as well with an asset analysis. I don't have the numbers in mind now. But of course, I can tell you that we are very optimistic about the opportunities we have with this partnership in Zimbabwe like the ones that has brought already in South Africa. Probably, I would say that the opportunities in Zimbabwe are bigger than the ones that we are getting in [indiscernible].

I already know the next question, so...

It's Rowan Goeller from Chronux Research. Just a quick question on your sales, your customer breakdown. You've increased your sales to independents and cut back from buying groups. Are you just really bypassing the buying groups? Or are you selling to a new group of independents in your fine customer mix?

What do you mean by bypass?

So you've reduced your sales to the buying groups...

Yes.

Quite a lot.

Yes.

And you're selling more to independents. So that's where the switch has happened.

Yes.

Are those independents the same customers that those buying groups would have been selling cement to? Are you acting as a middleman? Or are you finding new customers there?

Both things, I would say, that most of the customers were the ones that they were buying from us previously through the buying group, and they started to buy directly from us. But also we are incorporating -- we have been incorporating new customers in different regions. So I would say that talking about specifically about the graph that you saw, I would say around 70% were the previous customers that they were buying our cement through the buying group and now they are buying directly from us and 30% are new independent customers.

And then the second question, if I may. In your inland region, you've got SK9 also built by Sinoma, which I think it was the last kiln built in the country and [indiscernible] . The combination of those, where does it put you in terms of cost relative to your other inland competitors?

Well, that put us in the group with Mamba and [indiscernible] so I would say that in the inland region, there is one group that is [indiscernible] and PPC and there is another group that is -- well, I wouldn't be fair. I think it's [indiscernible] and PPC then comes [indiscernible] in terms of production cost, yes.

[indiscernible] from Adam Gray. First, congratulations on your results and your turnaround. I appreciate that your turnaround is not industry specific, but I just have some questions around the industry. Given the [indiscernible] transaction, do you now see industry consolidation as more or less likely to happen? And who in the market is more likely to take out their [indiscernible]? And also to speak of an industry body being formed, has that stalled or is that still ongoing to share industry stats as it used to be in the past...

[indiscernible] we have a problem, David. I mean we are not listening to question the same with [indiscernible] . I mean probably we can -- I mean the first question is about [indiscernible] but I couldn't get the question, sorry.

Can you hear me now?

Yes [indiscernible] .

So my second question was there was talk of an industry body being formed and the stats being shared as it was in the past. Has that stalled -- or should we still expect some progress on that? And the question was on consolidation. Now that the transaction has gone through, should we expect consolidation to come through? Is that more or less likely? And if so, who do you expect in your view to remove their old kilns?

There's a lot of questions. Let's start from the beginning. I think unfortunately, no. I don't see a cement body industry body progressing. We have different views with other cement players in terms of what the industry -- how the industry should be represented. We have a very strong views in terms of quality in the market. And we believe that we have some different views, not with all of our competitors, but with some of them of the importance of keeping the regulated, let's call it like this to make it simple quality in the market. So also linking that to AfriSam, when the question came last year, AfriSam was a strong supporter of limiting imported cement. And we already knew that AfriSam was in conversation with China. Now that AfriSam has been bought by West China, now AfriSam stops supporting importation duties from Mozambique, where West China has their plant. So it's very difficult to really have a cement association if you can't agree in at least minimum cement principle. Some players are not going to support actively the quality problem we have in the market and how to fix it or others are going to change their mind about imported cement suddenly. So it's very difficult. On the other hand, we are in the process of I having a conversation with some of our competitors because I'm meeting with the Minister of Trade and Industry, hopefully, is going to happen soon. And of course, in that case, of course, PPC is going to participate there, and we are going to present our views, our industry views jointly with the rest of the competitors. Then the second question about AfriSam. Yes, AfriSam deal was quite surprising that was not publicly and officially announced. Of course, the deal happened in December, but was not publicly announced. The buyer of AfriSam is West China, it's a regional cement company in China. It's not CNBM, it's not Conch, it's not [indiscernible]. It's a regional cement company who already has operations in Africa, mainly in Mozambique. Well, some of you might recall, I was the CEO of Cement of Mozambique when West China started the operation there and in Ethiopia. In both cases, they were greenfields where they built their own plants and mostly they run those plants with Chinese -- West China employees. This is a new ecosystem for West China because they will have to run now 2 oil kilns with quite an anticompetitive footprint. and a company that has struggled in terms of the fundamentals of the business. The other thing is that if you have been monitoring West China lately, you might have seen in December that they -- help me with the financial terms of what happened in December that they were trying to switch.

To refinance the bonds.

They refinanced their bonds in the Hong Kong stock exchange market. You can get that information. It's a public one. They used to have -- they try to refinance $400 million debt, and they were able to refinance $300 million, but they have now an interest rate of [ 10.5 ] comparing to the previous 4.5. So it's a company that is growing, is highly leveraged. So we will see that new experience in the market. Still, there is a [indiscernible] process that is underway. And it would be interesting to see the [indiscernible] approach in terms of what might be the plan from West China, which is to import cement from Mozambique with African brand. The third one is that if I was expecting more consolidation on which names, I think that, yes, consolidation might continue happening, not in the way that, as we mentioned, the market thought 2, 3 years ago. I'm not going to mention the names, but we believe that could happen. And ultimately, I think it's going to be good for the sector. I mean, I have a very controversial view that today I have tried to restrain myself from sharing. I think the last minute, [indiscernible] sorry, probably will. I think that the market has been expecting [indiscernible] for a market recovery. And like Paulo explained, profitability in cement does not come from a market recovery. It comes from cost and price discipline. The real problem in the market in South Africa is not differently to what other people think, and I respect that. My view is not very much about the economy coming back. Of course, if the economy comes back, it's going to be good for us. But what has destroyed value in the cement industry in South Africa for a long time is not the problem in terms of the construction market not growing. It's about cement companies destroying value through dropping prices and not protecting margins. So consolidation in the market probably will help on that. So I think ultimately, if we see other consolidation process happening, I think it's going to be beneficial for the market and obviously for PPC.

I don't see any other questions in the room. So I'm going to go to the -- so if you do just put your hand up and we'll come to you just now. But let me just go to the online questions. We have Rajay Ambekar from Excelsia. He's got 2 questions here. How long can the 59% old capacity continue? What sort of CapEx is needed to maintain it? What is the cost differential between the old and new capacity? And what are the key areas? Perhaps let's just stop with that question.

I will give the voice to my colleagues here to help me with that. The very old capacity and neglected capacity probably is almost impossible to fix. You will need to invest a lot of money. You need a lot of time. And even in that case, we are not going to be able to compete with the new technology and the new lines. The differential is big. I mean, again, I can give you the voice to Ernesto and Paulo and the team. But just an example, we are saying the new -- the RK3 is going to reduce 20% variable cost minimum -- sorry, 30% variable cost minimum, 20% around production and fixed cost. So you can run your numbers. The difference is significant. How long they will last, I can't answer that. I mean, in our case, we decided that running the 2 very old plants here in the West U.K. was not sustainable. If we wanted to be profitable and to have a sustainable future for PPC. What others are going to do, I don't have that answer...

Thanks, Matias. The next question is around procurement and logistics. Can you give a rough estimate of what further cost reductions you expect perhaps just a margin enhancement expected from the initiatives?

About logistics?

Logistics and procurement, yes.

Do you want to take [indiscernible] roughly?

Okay. Thank you for the question. That is really a difficult one. We do believe that as I was explaining, there is opportunity. The way that we handle the outbound logistics, especially is we have contracted 50% of our volumes in a fixed contract and 50% [indiscernible] -- so we are going to do a tender process for that 50% in FY 2027 in the Northern region. And we will continue optimizing the 50% [indiscernible] through the planning, the right planning through the S&OP, which reports to Paulo, which the commercial operation and logistic team to try to anticipate as much we can anticipate the sales and be uploaded in the system. The logistics team is able to allocate those sales or those deliveries to the cheapest transporter, which I think that I already mentioned in the Capital Market Day 2025 that price per [indiscernible] ton per kilometer difference between sometimes the cheapest and the most expensive transporter in the ad hoc basis is in the order of 40%, sometimes 50%. So the sooner that we can know those sales volume, we can use the cheapest supply. Really it's difficult to anticipate, to be honest, the savings. We will be happy if we can offset the inflationary cost, basically keep flat in rands offsetting the inflationary cost, excluding the war, excluding the potential impact of the petrol price in the short term that is expected in...

Yes. That is important because we received a question about during break, received a question about that particular -- some questions about whether we were going to absorb the increase in the cost of petrol in the diesel in South Africa. We have already communicated to our customers that we are going to pass that cost to the price because it's not feasible for us to do it. And some other competitors also, we saw yesterday that they were sending those letters to customers explaining that they might see an increase in the price of cement because of that.

But it's not a general price increase. It's specifically [indiscernible].

Yes. Related to correct.

And if I may add, Matias, regarding the previous question. So one of the cost differential in the RK3 compared with the existing all plants in our specific case is related with the coal consumption. And remember that coal or the carbon tax is related almost 50% with the process emission that you cannot avoid that, at least in the cement industry so far and 50% related with the coal consumption. So the trajectory of the carbon tax will make even worse the competitiveness of the kilns.

Thanks. Are there any -- those are all the questions online. I don't see any others.

Maybe just one for me, Matias. So I mean, despite the very significant success you've achieved to date, I mean all the presentations communicated quite meaningful opportunities that persist. And arguably, I'd say it sounds like incremental opportunities over what you previously communicated particular examples [indiscernible]. So taking that into account, why are you still cautious potentially about not expanding the terminal EBITDA margins that the business can deliver ultimately?

Paulo, do you want to take that?

Yes, I was expecting this question. And it's -- the answer is that first, this old plan was designed in low growth volume scenario. So all the numbers that we see there in terms of expectation of results will be amplified if there is an uptake in volume and the market or discipline between the players. All of that will have a complete different scenario in terms of our results. Then in terms of the long-term targets, they're still in place, but there's an important point there that you see it's above. So we say that it's above 22%, which is kind of the bottom threshold that we are putting for those targets as you see for the execution and the drive in terms of results that we are doing, we won't be aiming for a lower number. We will be aiming for more and more. So I think that's a little bit my point. So it's the baseline. It doesn't change because our numbers in terms of the opportunities and how we are going to capture throughout the period are still the same. The impact can be amplified, yes. But I think it's still the base for our baseline in terms of where we see the results going.

The previous management team spoke about a calcined clay project to reduce cost and reduce carbon footprint. Is that project still active?

The difference is the size of the project. It's progressing here in the West is going to be complementary to the RK3. The impact is not significant. So -- but the project is there. I mean like we talked in the past about these kind of things. I mean one thing is that could add some value and other thing is that, that value is going to be material. So yes, the project is still in place, and it's going to be complementary to the RK3, it's not a material change in terms of...

Are there any other questions in the...

Luke [indiscernible] from Primary Research. So going back to -- I think Ernesto mentioned that with the solar plant, there would be a 50% reduction in tariffs. But I'm more interested in what the impact would be on consistency of supply, efficiency and OEE, if you can maybe quantify that for me.

Okay. The tariff difference is 50%, 15% is in South Africa. And yes, in FY 2025, the OEE losses related [indiscernible] related problems were in the order of 4.5%. So with this solar plant plus the battery, which we will have in [indiscernible], we will be able to offset possible 3 points of those 4.5%, not the full 4.5% because sometimes the duration of the power outage are more than 4 hours, 5 hours, which is what the batteries will give us as a gap to absorb any power dips or power outage, but with less time than 4 hours, 5 hours. So we can recover just not all the full benefit on price, which is important, but also additional 3% clinker production.

[indiscernible] There have been times [indiscernible] has been something, that's been ongoing for a while, but never seems to have grown to anything significant. Is there a reason for this? What structurally is holding back on using alternative energy supplies?

So far, it's a problem of supply, and we are engaging with the [ West bureau ] to try to optimize that. We are confident that by the time that RK3 will start, we will be able to get that supply from the -- [indiscernible]. But it's basically a supply problem.

Supply as in there's not enough tires in the country or supply to the plant?

No, there is plenty of tires in the country. Sometimes dealing with the [ West bureau ] is a little bit challenging, but we are going to get the...

Any other questions? How is your chance...

The presentation is going to be shared, right?

The presentation will be on the website. Yes, if it's not already, it should be on the website in the next 30 minutes or so. So feel free to download it. If there are no other questions...

Final word. Thank you very much. Always it's good to spend time with all of you. We appreciate the questions. We appreciate the support. And we are looking forward next year to another Capital Market Day. Thank you very much.